1 November 2026 • 7 min read
This sheet is for product managers and founders who build onboarding for banks, NBFCs and payment companies, and who keep meeting terms such as CDD, OVD, V-CIP and CKYCR in specs. Each entry follows the Reserve Bank of India (Commercial Banks – Know Your Customer) Directions, 2025, issued on 28 November 2025 and shown as updated on 1 October 2026. Paragraph numbers refer to that text.
One thing to check first: RBI now publishes a separate KYC Direction for each type of regulated entity. Its Master Directions index lists commercial banks, small finance banks, payments banks, local area banks, regional rural banks, co-operative banks, all India financial institutions, NBFCs and asset reconstruction companies. The Commercial Banks Directions say the existing KYC directions as applicable to commercial banks stand repealed (para 80). If your partner is not a commercial bank, open its own Direction, because its wording may differ.
| Term | Meaning |
|---|---|
| Customer Acceptance | Banks must not open anonymous or fictitious (benami) accounts, or accounts where they cannot apply appropriate CDD (paras 17-18). The policy must not deny facilities to disadvantaged members of the public. |
| Walk-in customer | A person who does not have an account-based relationship with the bank, but undertakes transactions with the bank (para 5(2)(iv)). |
| Principal Officer | The bank's nominated officer at the management level, responsible for furnishing information as per rule 8 of the Rules (para 5(1)(xvii)). |
| Designated Director | A person whom the bank designates to ensure overall compliance (para 5(1)(vii)). Para 14(3) says the bank shall not nominate the Principal Officer as the Designated Director. |
| Term | Meaning |
|---|---|
| CDD (Customer Due Diligence) | Identifying and verifying the customer and the beneficial owner using reliable and independent sources of identification (para 5(2)(v)). |
| Customer identification | Undertaking the process of CDD (para 5(2)(vi)). |
| OVD (Officially Valid Document) | Begins with the passport, the driving licence and proof of possession of Aadhaar number, and also includes the Voter's Identity Card, a job card and a National Population Register letter (para 5(1)(xiv)). |
| Certified copy | Obtaining the certified copy means the bank compares the copy with the original, and an authorised officer records the comparison (para 5(1)(v)). |
| Equivalent e-document | An electronic equivalent of a document that the issuing authority of such document issues (para 5(1)(x)). |
| Offline verification | Has the meaning in the Aadhaar Act, 2016. The Direction points to that Act and does not reproduce the text (para 5(1)(xv)). |
| Digital KYC | An authorised officer of the bank captures a live photo of the customer and the OVD. The process steps are in para 24 (para 5(1)(viii)). |
| V-CIP (Video-based Customer Identification Process) | An alternative method by which an authorised official of the bank conducts customer identification with facial recognition and customer due diligence, through a live, informed-consent based audio-visual interaction, with an audit trail. The bank treats V-CIP that follows the standards on par with face-to-face identification (para 5(2)(xvi)). |
| Non-face-to-face customer | A customer who opens an account without visiting the branch or offices of the bank or meeting its officials (para 5(2)(x)). The bank shall categorise such customers as high-risk (para 44(6)). |
Para 44 sets measures for non-face-to-face onboarding. These are the ones that change product design.
| Term | Meaning |
|---|---|
| Beneficial owner, company | A natural person with more than 10 percent of the shares, capital or profits, or who exercises control through other means (para 5(1)(iv)). |
| Beneficial owner, partnership firm | A natural person with more than 10 percent of capital or profits. |
| Beneficial owner, unincorporated association or body of individuals | A natural person with more than 15 percent of property, capital or profits. |
| Beneficial owner, trust | The author, the trustee, the beneficiaries with 10 percent or more interest, and any natural person exercising ultimate effective control. |
| PEP (Politically Exposed Person) | Individuals entrusted with prominent public functions by a foreign country, including heads of state or government and senior politicians. Family members and close associates are also covered (explanation to para 45). |
| Shell bank | A bank that has no physical presence in the country in which it is incorporated and licensed (para 5(2)(xv)). |
| Term | Meaning |
|---|---|
| CKYCR (Central KYC Records Registry) | The registry defined under the PML Rules, tasked to receive, store, safeguard and retrieve the KYC records in digital form of a customer (para 5(1)(vi)). |
| KYC Identifier | The unique number or code that the Central KYC Records Registry assigns to a customer (para 5(1)(xii)). |
| CKYCR upload | Para 65(2) requires upload within 10 days of commencement of an account-based relationship with the customer. |
| Record keeping | Transaction records for at least five years from the date of transaction (para 50(1)), and identification records for at least five years after the business relationship has ended (para 50(2)). |
| Small account | A savings account opened in terms of sub-rule (5) of rule 9 of the PML Rules, 2005 (para 5(1)(xix)). Para 28 limits credits in a financial year to Rupees One Lakh, withdrawals and transfers to ₹10,000 in a month, and the balance at any time to ₹50,000. |
| Term | Meaning |
|---|---|
| Risk categories | The bank shall categorise customers into low, medium and high-risk categories (para 20(1)). |
| Periodic updation | The steps taken to ensure that documents, data or information collected under the CDD process are kept up to date (para 5(2)(xiii)). |
| Updation frequency | At least once in every two years for high-risk customers, once in every eight years for medium-risk customers and once in every 10 years for low-risk customers, counted from account opening or the last update (para 42(1)). |
| On-going due diligence | Regular monitoring of transactions in accounts (para 5(2)(xi)). Para 39 requires it to keep transactions consistent with the bank's knowledge of the customer. |
| Suspicious transaction | One that gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence, including one that appears to have no economic rationale or bona fide purpose (para 5(1)(xviii)). |
RBI amends these Directions often, so check the current text for your partner's entity type and confirm with your compliance adviser.
In the Direction, customer identification means undertaking the process of CDD. CDD is the work of identifying and verifying the customer and the beneficial owner using reliable and independent sources.
At least once in every two years for high-risk customers, once in every eight years for medium-risk customers and once in every 10 years for low-risk customers (para 42(1) of the Commercial Banks Directions).
The unique number or code that the Central KYC Records Registry assigns to a customer. The Directions require banks to retrieve records from the registry online.
The Directions say a bank shall treat V-CIP that follows the prescribed standards on par with face-to-face identification. Customers who open accounts without visiting the bank or meeting its officials are non-face-to-face customers, and para 44 sets extra checks and a high-risk categorisation for them. Ask your partner how it applies these rules to your flow.
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