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KYC/AML Record Retention Reduced to 5 Years for Money Changing Activities by Authorised Persons

Current · Source: Reserve Bank of India · RBI/2013-14/657 · issued 25 Jun 2014 · ~1 min read
Quick answerRBI has reduced the mandatory record retention period for KYC/AML documents under PMLA from 10 years to 5 years for Authorised Persons, specifically for money changing activities, effective from June 25, 2014.
The rule, in the simplest words
How it plays out — a real example

Priya, a KYC & compliance officer in Indore, also handles foreign currency exchange at her branch. She used to keep customer KYC papers for 10 years, filling up storage. Now, after the RBI rule change, she can safely shred records older than 5 years for money changing transactions, freeing up space and reducing paperwork.

What changed

Previously, Authorised Persons had to maintain and preserve KYC/AML records for money changing activities for at least 10 years under PMLA. Following the 2012 amendment to Section 12 of PMLA, RBI has aligned its circular to reduce this period to a minimum of 5 years for such activities.

What it means for you

Banks and other Authorised Persons handling money changing can now purge older KYC/AML records after 5 years instead of 10, reducing storage and compliance costs. However, they must ensure that records are still preserved for the full 5-year period and comply with any other legal requirements.

What you must do

Who it affects

All Authorised Persons (banks, money changers) under FEMA engaged in money changing activities, Compliance and AML/KYC teams handling money changing records, Record management and legal departments

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Does this circular apply to all KYC records or only those related to money changing?

This circular specifically addresses records related to money changing activities under PMLA. Other KYC/AML records may still be subject to different retention periods as per other regulations.

Can we destroy records that are exactly 5 years old from the date of transaction?

Yes, once the 5-year period from the date of the transaction or account closure (whichever is later) has elapsed, you may destroy those records, provided no other law requires longer retention.

📜 Read the original circular — full text as issued by RBI
RBI/2013-14/657 A. P. (DIR Series) Circular No. 149 June 25, 2014 To, All Authorised Persons Madam / Sir, Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/ Combating the Financing of Terrorism (CFT)/ Obligation of Authorised Persons under Prevention of Money Laundering Act (PMLA), 2002 – Money Changing Activities - Change in period of maintenance and preservation of records Please refer to clause (iii) – ‘Maintenance and Preservation of Record’ of para 4.13 of our A.P. (DIR Series) Circular No.17 [A.P. (FL/RL Series) Circular No.04] dated November 27, 2009 on the captioned subject, as amended from time to time. 2. In terms of the above mentioned provisions, Authorised Persons are required to maintain and preserve records mentioned therein for a period of at least ten years. In view of the amendment to Section 12 of Prevention of Money Laundering Act, 2002 through Prevention of Money Laundering (Amendment) Act, 2012, Authorised Persons are now required to maintain and preserve records for a period of at least five years . 3. The directions contained in this Circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and also under the, Prevention of Money Laundering Act, (PMLA), 2002, as amended from time to time and are without prejudice to permission /approvals, if any, required under any other law. Yours faithfully, (B. P. Kanungo) Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/657 · issued 25 Jun 2014. The plain-English explanation above is BankPulse’s own independent summary.
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Topics: KYC / AML
Most relevant forCompliance TeamKYC / AML AnalystInternal AuditBranch Manager — Private Bank / SFBBranch Operations (Accounts / FD / CASA)Teller / Cashier / Customer Service Officer
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Key termsPlain-English definitions of terms in this circular — see the full Indian banking glossary. KYC / AML · Master Direction · Deposit insurance (DICGC)
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Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (All Authorised Persons (banks, money changers) under FEMA engaged in money changing activities, Compliance and AML/KYC teams handling money changing records, Record management and legal departments), your first concrete step on “KYC/AML Record Retention Reduced to 5 Years for Money Changing Activities by Authorised Persons” is: “Update your internal KYC/AML record retention policy to reflect the 5-year minimum period.” (RBI issued this 25 Jun 2014).

  1. Circular: RBI/2013-14/657 -- KYC/AML Record Retention Reduced to 5 Years for Money Changing Activities by Authorised Persons
  2. Issued: 25 Jun 2014
  3. Action required: Update your internal KYC/AML record retention policy to reflect the 5-year minimum period.
  4. Action required: Review and safely dispose of records older than 5 years that are no longer required under PMLA.
  5. Action required: Ensure compliance with other applicable laws that may require longer retention.
  6. Action required: Train staff on the revised retention timeline for money changing activities.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8959&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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