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MTSS record retention reduced to 5 years

Current · Source: Reserve Bank of India · RBI/2013-14/658 · issued 25 Jun 2014 · ~2 min read

Quick answerRBI has reduced the mandatory record retention period for Indian Agents under MTSS from 10 years to 5 years, aligning with the amended PMLA, 2002. This change applies to KYC/AML/CFT records and takes immediate effect.

The rule, in the simplest words

Indian Agents (companies that send money from abroad to India) under MTSS (a system for sending money) must keep customer records for only 5 years now, instead of 10 years.
This change matches the PMLA (a law to stop money laundering) which was updated in 2012.
The new rule started on June 25, 2014, and applies to KYC (checking customer identity), AML (stopping money laundering), and CFT (stopping terrorism funding) records.
Agents can delete records older than 5 years, but must keep all records for the full 5 years ready for RBI (the central bank) to check.

How it plays out — a real example

Priya, a compliance officer at a bank in Mumbai that acts as an Indian Agent under MTSS, used to keep customer records for 10 years. Now, after this rule change, she updates her system to automatically delete records after 5 years, saving storage space and making it easier to find the records the RBI might ask for.

What changed

Earlier, Indian Agents under MTSS had to keep prescribed records for at least 10 years. Now, following the Prevention of Money Laundering (Amendment) Act, 2012, the minimum retention period has been cut to 5 years. This revision is effective from June 25, 2014.

What it means for you

Banks and authorised persons acting as Indian Agents under MTSS can now purge older records after 5 years instead of 10, reducing storage and compliance costs. However, they must ensure that records for the full 5-year period are readily available for regulatory scrutiny. This change does not affect other legal or regulatory requirements.

What you must do

Update your internal policies and procedures to reflect the new 5-year record retention period for MTSS-related KYC/AML/CFT records.
Review and revise your record-keeping systems to ensure compliance with the reduced timeline, and dispose of records older than 5 years as per your data destruction policy.
Train relevant staff on the updated retention requirement to avoid inadvertent non-compliance.
Maintain a clear audit trail of record disposal actions taken under the new rule.

Who it affects

All Authorised Persons who are Indian Agents under the Money Transfer Service Scheme (MTSS), Banks and financial institutions acting as MTSS agents, Compliance and AML/KYC teams within these entities

❓ Common questions

Regulatory timeline

Stated effective date effective from June 25, 2014
Decoded by BankPulse 2026-06-18 09:14 IST

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

Does this circular apply to all records or only specific ones?

It applies to the records mentioned in clause (a) of para 3.2 and clause (iii) of para 5.12 of the earlier circular (A.P. DIR Series No.18 dated Nov 27, 2009), which cover KYC, AML, and CFT-related documents under MTSS.

Can we immediately delete records older than 5 years?

Yes, but only after ensuring that no other legal or regulatory requirement mandates a longer retention period. Also, maintain a proper record of destruction as per your internal policies.

What if we have already kept records for 10 years as per the old rule?

You are now permitted to reduce retention to 5 years. You may dispose of records older than 5 years, provided you have no pending litigation or regulatory inquiry requiring them.

📜 Read the original circular — full text as issued by RBI

RBI/2013-14/658
 A. P. (DIR Series) Circular No. 150
 June 25, 2014
 To,
 All Authorised Persons, who are Indian Agents under Money Transfer Service Scheme (MTSS)
 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 Transfer Service Scheme - Change in period of maintenance and preservation of records
 Please refer to clause (a) of para 3.2 and clause (iii) – ‘Maintenance and Preservation of Record’ of para 5.12 of our A.P. (DIR Series) Circular No.18 [A.P. (FL/RL Series) Circular No.05] dated November 27, 2009 on the captioned subject, as amended from time to time.
 2. In terms of the above mentioned provisions, Authorised Persons who are Indian Agents under MTSS 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 who are Indian Agents under MTSS 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/2013-14/658 · issued 25 Jun 2014. The plain-English explanation above is BankPulse’s own independent summary.

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Who does what — compliance checklist

⚙️ Operations

Review and revise your record-keeping systems to ensure compliance with the reduced timeline, and dispose of records older than 5 years as per your data destruction policy.

📜 Compliance

Update your internal policies and procedures to reflect the new 5-year record retention period for MTSS-related KYC/AML/CFT records.
Train relevant staff on the updated retention requirement to avoid inadvertent non-compliance.
Maintain a clear audit trail of record disposal actions taken under the new rule.

Grouped from the action items above — a single circular may involve more than one team.

Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (All Authorised Persons who are Indian Agents under the Money Transfer Service Scheme (MTSS), Banks and financial institutions acting as MTSS agents, Compliance and AML/KYC teams within these entities), your first concrete step on “MTSS record retention reduced to 5 years” is: “Update your internal policies and procedures to reflect the new 5-year record retention period for MTSS-related KYC/AML/CFT records.” (RBI issued this 25 Jun 2014).

Circular: RBI/2013-14/658 -- MTSS record retention reduced to 5 years
Issued: 25 Jun 2014
Action required: Update your internal policies and procedures to reflect the new 5-year record retention period for MTSS-related KYC/AML/CFT records.
Action required: Review and revise your record-keeping systems to ensure compliance with the reduced timeline, and dispose of records older than 5 years as per your data destruction policy.
Action required: Train relevant staff on the updated retention requirement to avoid inadvertent non-compliance.
Action required: Maintain a clear audit trail of record disposal actions taken under the new rule.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
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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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8960&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.