RBI CIRCULAR

September 11, 2025 admin 0 Comments AD Category-I banks, banking compliance, banking regulations, Cheque Truncation System, Continuous Clearing CTS, FEMA regulations, Foreign Exchange Management, Government securities, KYC amendment 2025, Non-resident investment, payment and settlement systems, rbi, RBI circulars, Special Rupee Vostro Account, SRVA guidelines

Reserve Bank of India (Know Your Customer (KYC)) (2nd Amendment) Directions, 2025

August 14, 2025

1. Reserve Bank had issued Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016 (hereinafter re- ferred to as Master Direction) in compliance of the provisions of the PML Act, 2002 and the Rules made thereunder. There is a need to further amend the same based on a review of the extant instructions.

2. Accordingly, in exercise of the powers conferred by sections 35A of the Banking Regulation Act, 1949, read with section 56 of the Act ibid, sections 45JA, 45K and 45L of the Reserve Bank of India Act,1934, section 10(2) read with section 18 of Payment and Settlement Systems Act, 2007, section 11(1) of the Foreign Exchange Management Act, 1999, Rule 9(14) of Prevention of Money-Laundering (Maintenance of Records) Rules, 2005 and all other laws enabling the Reserve Bank in this regard, the Reserve Bank being satisfied that it is necessary and expedient in the public interest to do so, hereby issues the Amendment Directions hereinafter specified.

3. (i) These Directions shall be called the Reserve Bank of India (Know Your Customer (KYC)) (2nd Amendment) Directions, 2025.

(ii) These directions shall come into force with immediate effect.

4. These Amendment Directions modify the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016 as under:

i. In paragraph 1, the following words shall be in- serted after sub-para 1(b), namely: –

“1(c) The Frequently Asked Questions (FAQs) on KYC may be accessed at the following link – Re- serve Bank of India – Frequently Asked Questions (rbi.org.in).”.

ii. In paragraph 11, after the word “disadvantaged”, the following words shall be inserted, namely: – “including the Persons with Disabilities (PwDs). No application for onboarding or periodic updation of KYC shall be rejected without application of Reason(s) of rejection shall be duly recorded by the officer concerned.”

iii. In paragraph 14, after the word “relationship”, the following words shall be inserted, namely: –

“or while carrying out occasional transaction of an amount equal to or exceeding rupees fifty thousand, whether conducted as a single transaction or several transactions that appear to be connected, or any international money transfer operations”

iv. In Explanation 2 of paragraph 16, after the word “authentication”, the following words shall be inserted, namely:

“including Aadhaar Face Authentication”

v. In paragraph 18 (b) (i), after the words “upon it.” The following words shall be inserted, namely: –

“The liveness check shall not result in exclusion of person with special needs.”

vi. In the Appendix,

a. the following shall be inserted after serial number 205, namely: –

“205A. DNBS. (PD). CC.164/03.10.042/2009-10

dated November 13, 2009”; and

b. the following shall be inserted after serial number 206, namely: –

“206A. DNBS. (PD). CC.No.171/03.10.42/2009-

10 dated April 23, 2010”.

Introduction of Continuous Clearing and Settle- ment on Realisation in Cheque Truncation Sys- tem

August 13, 2025

1. Please refer to the Statement on Developmental and Regulatory Policies dated August 8, 2024, announcing the transition of Cheque Truncation System (CTS) from the current approach of batch processing to continu- ous clearing with settlement on realisation.

2. It has been decided to transition CTS to continuous clearing and settlement on realisation in two phases. Phase 1 shall be implemented on October 4, 2025 and Phase 2 on January 3, 2026. The modalities for the same are given in Annex.

3. All banks are advised to make their customers ad- equately aware of the changes in the cheque clearing

4. Banks are also advised to be in readiness to partici- pate in continuous clearing in CTS on the above

5. This directive is issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007).

Investment in Government Securities by Per- sons Resident Outside India through Special Rupee Vostro account

August 12, 2025

1. Attention of Authorised Dealer Category-I (AD Cat- egory-I) banks is invited to Schedule 1 to the Foreign Exchange Management (Debt Instruments) Regula- tions, 2019 notified, vide Notification No. FEMA. 396/ 2019-RB dated October 17, 2019, and the Foreign Ex- change Management (Deposit) Regulations, 2016 no- tified, vide Notification FEMA. 5(R)/2016-RB dated April 01, 2016 as amended from time to time and the relevant Directions issued thereunder. A reference is also invited to the Master Direction – Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025 dated January 07, 2025 (hereinafter “Master Direction”).

2.Persons resident outside India that maintain a Special Rupee Vostro Account (SRVA) for international trade settlement in Indian Rupees in terms of A.P. (DIR Series) Circular No. 10 dated July 11, 2022 may invest their rupee surplus balance in the aforesaid account in Central Government Securities (including Treasury Bills).

3. Necessary operational instructions in this regard have been incorporated in the Master Direction; and the updated Master Direction is issued herewith.

4. These directions shall come into immediate

5. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

6. The Directions contained in this circular have been is- sued under sections 10(4) and 11(1) of the Foreign Ex- change Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approval, if any, required under any other law.

International Trade Settlement in Indian Ru- pees (INR)

August 5, 2025

1. Attention of Authorised Dealer (AD) Category – I banks is invited to Para 10 of A.P (DIR Series) Circular No.10 dated July 11, 2022 on the captioned subject.

2. On a review, it has been decided to allow AD banks to open Special Rupee Vostro Accounts (SRVAs) of over- seas correspondent banks without referring to the Reserve Bank for approval.

3. The above instruction is applicable with immediate effect. AD banks may bring the contents of this circular to the notice of its constituents and customers con-

These directions are issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.