Bank KYC Update: The Reserve Bank of India (RBI) has taken an unprecedented step regarding the KYC (Know Your Customer) update of bank accounts. Now the hassle of getting KYC updated has become very easy. RBI issued a notification on June 12, 2025, in which important changes have been made in two processes of KYC update. First, now Banking Correspondents (BC) i.e. bank agents, like grocery shopkeepers of your area or institutions like NGO, SHG, and MFI will also be able to get KYC updated.

Second, banks will now inform customers at least three times in advance of KYC update, in which it will be mandatory to give information through letter once. This change is a big relief for those who have difficulty getting KYC updated, especially for those living in rural and semi-urban areas. Let us understand this change in detail and know how it will prove to be a ‘boon’ for crores of bank customers.

Who are Banking Correspondents

Banking Correspondents (BCs) are individuals or organizations appointed by the bank as their agents. These people provide banking services in areas where there are very few or no bank branches. Your neighborhood grocery store owner, an NGO (non-governmental organization), a self-help group (SHG), a micro microfinance institution (MFI), or any other civil society organization (CSO) can also become a BC, provided it gets permission from the bank.

Extension branch of the bank

According to the website of Union Bank of India, Business Correspondent is an extended branch of the bank branch, which provides banking and financial services in areas where banking facilities are limited.

What will be the benefit now

This means that now you will be able to get your KYC updated from the grocery shopkeeper of your area! This facility will prove to be revolutionary for those who used to have trouble going to distant bank branches.

What major changes did RBI make in the KYC update

RBI has made two major changes to make the process of KYC update easier. Let’s understand these in simple language:

1. Banking correspondents will now update KYC

Now if you want to make any changes in your KYC details, you can give a self-declaration through the authorized BC of the bank. This self-declaration will now be recorded in the bank’s system in electronic form.

How will this happen

  • You will have to undergo biometric-based e-KYC authentication with the BC.
  • If electronic mode is not available, you can give a self-declaration in physical form.
  • The BC will have to send this declaration and the required documents to the bank branch as soon as possible. The BC will also give you a receipt for submitting the declaration or documents.
  • The bank will update your KYC record and inform you that the record has been updated.

2. Advance notice is mandatory for KYC update

RBI has given strict instructions to banks to inform customers at least three times before the due date of the KYC update. In this, it is mandatory to give information through letter once.

What will be the process

The bank will have to remind customers at least three times before the due date of the KYC update. This information can be given by email, SMS, or other available methods, but it is mandatory to send a letter once.

  • If KYC is not updated even after the due date, the bank will have to send reminders at least three more times, which will include a letter once again.
  • These letters will mention easy information about updating KYC, how to contact for help, and problems caused by not updating KYC.
  • Banks will have to keep a record of this information and reminders in their system so that it can be shown at the time of audit.

Note: It is mandatory to implement these rules by January 1, 2026.

A large number of pending cases

Especially a large number of KYC updates were pending in accounts opened under DBT (Direct Benefit Transfer), EBT (Electronic Benefits Transfer), scholarship, and Pradhan Mantri Jan Dhan Yojana (PMJDY).