Reserve Bank of India (Rural Co-operative Banks – Know Your Customer) Directions, 2025 (Updated as on December 29, 2025)
UR
- Applies toRural co-operative banks
- StatusIn force
- ImportanceMUST READ
- IssuedNov 28, 2025
- Last amendedDec 29, 2025 · 1 incorporated
- Length79 points in 5 sections · 7 min read
The four dates on this rule
- PublishedNov 28, 2025The day RBI put this document out.
- Starts to applyNot statedNot stated separately in this document. Read the rule itself before you assume a start date.
- Time to get readyNot statedCannot be worked out until the day it starts to apply is known.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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Numbers to remember
| ten per cent | For a company, holding more than ten per cent is one test of beneficial ownership. RBI Para 4(1) |
| fifteen per cent | In an unincorporated body the same test is more than fifteen per cent. RBI Para 4(1) |
| ₹50,000 | A walk-in customer paying ₹50,000 or more must be identified in the same way. RBI Para 20(5) |
| one lakh rupees | In an Aadhaar one-time password account the total balance cannot cross one lakh rupees. RBI Para 24(3) |
| two lakh rupees | Credits into those accounts in a financial year cannot cross two lakh rupees. RBI Para 24(4) |
| one year | An account opened by Aadhaar one-time password cannot run past one year without full checks. RBI Para 24(6) |
| ten thousand rupees | Withdrawals and transfers together cannot cross ten thousand rupees in a month. RBI Para 27(2) |
| six months | Customer risk categories must be reviewed at least once in every six months. RBI Para 40(1) |
| two years | Papers of a high-risk customer must be refreshed at least once in two years. RBI Para 41(1) |
| eight years | For a medium-risk customer the gap may be eight years. RBI Para 41(1) |
| ten years | For a low-risk customer the gap may be ten years. RBI Para 41(1) |
| 30 days | A change in a customer's papers must reach the bank's records within 30 days. RBI Para 41(6) |
| five years | Transaction records must be kept for at least five years from the date of the transaction. RBI Para 49(1) |
| ten days | A new customer's KYC record goes to the central registry within ten days. RBI Para 64(2) |
What it says
Opening paragraphs
1. The law behind it
The rules rest on the Prevention of Money-Laundering Act, 2002 and its 2005 Rules.
Chapter I. Preliminary
Must know
1. Ten per cent, a company
For a company, holding more than ten per cent is one test of beneficial ownership.
2. Fifteen per cent, a body
In an unincorporated body the same test is more than fifteen per cent.
Do it
3. Designated Director named
The Board must name a Designated Director who answers for compliance under the Act.
Background
4. KYC rules for RCBs
This document sets the customer identification rules for rural co-operative banks.
5. Who is covered
These Directions apply to every rural co-operative bank.
6. Control counts as well
A person who controls the entity by other means is a beneficial owner too.
7. Then the senior official
Where no natural person can be found, the senior managing official is named.
8. What a remote customer is
A remote customer is one who opens an account without meeting the bank at all.
9. What a shell bank is
A shell bank has no physical presence where it is licensed and no real group behind it.
10. Video call identification
A bank officer may identify a customer over a live video call.
11. Video equals a meeting
A video call that follows the rules counts the same as meeting in person.
Chapter II. General
Must know
1. Never tip off a customer
Group information sharing must be built so that nobody is tipped off.
2. The decision stays inside
Whether KYC has been met is a decision the bank cannot outsource to anyone.
3. Director reported to FIU-IND
The name and contact details of that Director must go to FIU-IND and RBI.
Do it
4. Board approves KYC policy
The Board must approve the bank's customer identification policy.
5. Four parts to the policy
The policy must cover acceptance, risk management, identification and monitoring.
Background
6. Board policy on mobile changes
A Board approved policy is needed for changing a mobile number on a remote account.
7. Board approves cross-border terms
The Board, or a committee led by the Chairman or chief executive, sets the terms.
8. Quarterly note to the committee
An audit note and compliance go to the Audit Committee every quarter.
9. Principal Officer duties
The Principal Officer watches transactions and reports what the law requires.
Chapter III. Customer Acceptance Policy
1. No anonymous accounts
No account may be opened in an anonymous, fictitious or benami name.
2. No account without checks
Where customer due diligence cannot be done, the account is not opened at all.
Chapter V. Customer Identification Procedure (CIP)
1. Walk-in customers too
A walk-in customer paying ₹50,000 or more must be identified in the same way.
Chapter VI. Customer Due Diligence (CDD) Procedure
Must know
1. OTP account balance limit
In an Aadhaar one-time password account the total balance cannot cross one lakh rupees.
2. Two lakh a year
Credits into those accounts in a financial year cannot cross two lakh rupees.
3. OTP account, one year
An account opened by Aadhaar one-time password cannot run past one year without full checks.
4. Questions must change
The officer must change the questions so the video cannot be a recording.
5. Printed e-PAN not valid
A printed copy of an electronic document, such as an e-PAN, cannot be used.
6. Small account credit limit
In a small account, credits in a financial year cannot cross one lakh rupees.
7. Small account withdrawal limit
Withdrawals and transfers together cannot cross ten thousand rupees in a month.
8. Risk reviewed twice a year
Customer risk categories must be reviewed at least once in every six months.
9. High risk, two years
Papers of a high-risk customer must be refreshed at least once in two years.
BankPulse example. Suppose a high-risk customer's papers were refreshed today. They must be refreshed again within two years. For a medium-risk customer the same papers would last eight years. For low risk they would last 10 years.
10. Medium risk, eight years
For a medium-risk customer the gap may be eight years.
11. Low risk, ten years
For a low-risk customer the gap may be ten years.
12. Thirty days to update
A change in a customer's papers must reach the bank's records within 30 days.
13. No second mobile number
A second mobile number cannot be linked to such an account for one-time passwords.
Do it
14. Live location in video
The video must carry the customer's live location, with the date and time.
15. Aadhaar number blacked out
The Aadhaar number must be blacked out in the records the bank keeps.
16. Video data kept in India
The whole video record must sit on systems inside India.
17. Three warnings before
At least three advance intimations must go out before KYC falls due, one by letter.
18. Three reminders after
At least three reminders must follow, again including one by letter.
19. Notice before stopping account
Before it temporarily stops an account for a missing PAN, the bank must give notice.
20. First credit from own bank
The first money into such an account must come from the customer's checked account.
21. Find the source of funds
For a politically exposed person the source of funds and wealth must be established.
22. Senior approval for PEPs
If a customer becomes a politically exposed person, senior management must approve keeping the account.
Background
23. Only term loans there
In such an account only a term loan may be sanctioned, within a set ceiling.
24. Audit before account opens
An account opened by video call starts working only after an audit clears it.
25. Government money not counted
Government grants and welfare payments do not count against that balance limit.
26. Only credits on loans
When a loan account is stopped, only credits into it are allowed.
27. Watched until met in person
Such an account stays under closer watch until the customer is seen or verified by video.
28. Politically exposed persons
A relationship with a politically exposed person is allowed only on set terms.
29. Senior approval for a PEP
Opening an account for such a person needs senior management approval.
30. Their families are covered
The same duties apply to the family members and close associates of such a person.
31. Self help groups eased
The bank need not check every member of a self help group at account opening.
Chapter VII. Record Management
1. Records kept five years
Transaction records must be kept for at least five years from the date of the transaction.
2. Identity papers after closure
Customer identity records must be kept for five years after the relationship ends.
3. Charities on DARPAN
A non-profit customer must be registered on the DARPAN portal of NITI Aayog.
Chapter VIII. Reporting Requirements to Financial Intelligence Unit – India
1. Alerts for odd transactions
Software must raise an alert when a transaction does not match the customer's profile.
2. Report does not freeze
Filing a suspicious transaction report is not by itself a reason to stop an account.
Chapter IX. Requirements/obligations under International Agreements - Communications from International Agencies
1. Freeze order acted on
A freeze order under section 12A must be acted on without delay.
2. Sanctions list checked daily
The UNSCR 1718 sanctions list must be checked every single day.
3. Duty under the UAPA
The bank carries duties under section 51A of the Unlawful Activities Prevention Act.
4. Duty under the WMD Act
Separate duties arise under the Weapons of Mass Destruction Act of 2005.
Chapter X. Other Instructions
Must know
1. Ten days to the registry
A new customer's KYC record goes to the central registry within ten days.
2. Seven days for an update
Updated customer information must reach the central registry within seven days.
3. Money mule accounts
The bank must find accounts used as money mules and report them to FIU-IND.
4. Account payee cheques
The bank cannot collect an account payee cheque for anyone except the payee.
5. No dealing with shell banks
A correspondent relationship with a shell bank cannot be opened or continued.
6. Nor through another bank
The respondent bank must not let a shell bank use its accounts either.
7. Three days for details
Details of a wire transfer must be supplied within three working days of a request.
8. Splitting transfers still checked
A person splitting transfers to stay below ₹50,000 must still be identified.
9. Transfer stopped if unclear
The bank must not send the transfer if it cannot meet these rules.
Do it
10. Foreign tax reporting too
The rules on foreign account tax reporting must be followed alongside these.
11. Training differs by role
Training must differ for counter staff, compliance staff and staff opening new accounts.
Background
12. Records sent to CKYCR
Records of company accounts opened on or after 1 April 2021 go to CKYCR.
Chapter XI. Repeal and Other Provisions
1. Old actions preserved
Anything already done under the old rules stays governed by those old rules.
2. Approvals carried over
Approvals given under the cancelled rules are now treated as given under these rules.
3. Other laws still apply
These Directions add to other laws. They do not replace any of them.
What RBI has fined people for under this rulebook
RBI has imposed 46 monetary penalties on this kind of lender. In each one its own stated reason names the subject of this rulebook. The 12 most recent are listed here. Each one links to the press release it was read from.
This tells you the rulebook RBI named. It does not tell you which of the points on this page was broken, because RBI does not say. Read the order itself before drawing any conclusion about your own bank.
Sep 10, 2026. Jilla Sahakari Bank Ltd., Azamgarh, Uttar Pradesh — ₹1.15 lakh (Rupees One Lakh and Fifteen Thousand only). RBI press release
Aug 27, 2026. Jalna District Central Co-operative Bank Ltd., Maharashtra — ₹50,000 (Rupees Fifty Thousand only). RBI press release
Aug 10, 2026. The Amravati District Central Co-operative Bank Ltd., Maharashtra — ₹50,000 (Rupees Fifty Thousand only). RBI press release
Jul 20, 2026. The United Puri-Nimapara Central Co-operative Bank Limited, Odisha — ₹3 lakh (Rupees Three Lakh only). RBI press release
Jul 13, 2026. The Nawada Central Co-operative Bank Limited, Bihar — ₹50,000/- (Rupees Fifty Thousand only). RBI press release
Jul 13, 2026. The Sambalpur District Co-operative Central Bank Limited, Odisha — ₹8 lakh (Rupees Eight Lakh only). RBI press release
Jun 18, 2026. The Chitradurga District Co-operative Central Bank Ltd., Chitradurga, Karnataka — ₹1.50 lakh (Rupees One Lakh Fifty Thousand only). RBI press release
Jun 08, 2026. The Karnal Central Cooperative Bank Limited, Haryana — ₹3 lakh (Rupees Three Lakh only). RBI press release
May 27, 2026. The Jalore Central Co-operative Bank Limited, Rajasthan — ₹2 lakh (Rupees Two Lakh only). RBI press release
May 14, 2026. Jilla Sahakari Kendriya Bank Maryadit, Seoni, Madhya Pradesh — ₹1.50 lakh (Rupees One Lakh Fifty Thousand only). RBI press release
Apr 23, 2026. Hardoi Jilla Sahkari Bank Ltd., Uttar Pradesh — ₹1 lakh (Rupees One lakh only). RBI press release
Apr 13, 2026. The Himachal Pradesh State Co-operative Bank Ltd., Himachal Pradesh — ₹7,50,000/- (Rupees Seven Lakh Fifty Thousand only). RBI press release
These come from RBI press releases. The penalty tracker holds them all. It also lists the penalties we could not place on any rulebook, and the reason for each one.
How this rule has changed
The points above are the rule as it stands today, after every change listed here.
Issued on Nov 28, 2025. This is the date RBI put the rule out.
Changed on Dec 29, 2025. Takes effect Immediate effect (date of the amendment)..
- When this starts. These amendment rules apply from the date they are issued.
- Last uploader duty. The bank that last uploaded or updated KYC must check the customer's identity or address, as needed.
- Other CDD duties stay. The bank that downloads KYC stays fully responsible for customer due diligence, except identity or address checks.
The same subject for other kinds of institution
The same subject for other kinds of institution.
Other RBI rules for rural co-operative banks
RBI Kisan Credit Card rules for rural co-operative banks 2026
RBI capital adequacy rules for rural co-operative banks 2025
RBI credit bureau reporting rules for rural co-operative banks 2025
RBI customer service and fair conduct rules for rural co-operative banks 2025
RBI deposit interest rate rules for rural co-operative banks 2025
RBI digital banking channel rules for rural co-operative banks 2025
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