In a move to ease the KYC (Know Your Customer) process, the Reserve Bank of India (RBI) has announced that individual low-risk customers can continue using their bank accounts even if their KYC is pending — as long as it is updated by June 30, 2026, or within one year of the due date, whichever is later.
This decision aims to address the backlog in periodic KYC updates, especially in accounts opened for government benefits such as Direct Benefit Transfers (DBTs), scholarships, and under the Pradhan Mantri Jan Dhan Yojana (PMJDY).
To make the process smoother, the RBI has now allowed Business Correspondents (BCs) to help customers update their KYC. BCs can also help reactivate dormant or inoperative accounts.
If there is no change in the KYC information or just a change in address, customers can give a self-declaration through an authorised BC. Banks will now digitally record these declarations and any supporting documents.
The RBI's move follows a recent call by Finance Minister Nirmala Sitharaman to simplify and streamline KYC experiences for citizens across the financial sector.
This step is expected to make banking more accessible and reduce hassles for millions, especially those relying on government welfare schemes.
