India is set to launch an updated Central KYC Registry (CKYCR) in 2025, introducing significant enhancements to the country’s financial sector identity verification infrastructure. The development extends India’s existing digital identity ecosystem, which includes the Aadhaar authentication system that has been progressively expanded to serve both government and private sector needs.
The revamped system aims to streamline know-your-customer processes across financial institutions while incorporating advanced technological features. The initiative follows several successful digital identity projects in India, including India Post’s implementation of Aadhaar-based eKYC for savings accounts.
The enhanced CKYCR will implement a uniform KYC system featuring unique identifiers linked to independent ID proofs. The centralized approach is designed to eliminate redundant registration processes and reduce operational costs for financial institutions. The system enhances India’s growing digital identity infrastructure, which has seen increasing adoption of biometric and facial recognition technologies.
Key technological improvements include AI-based matching algorithms with face matching capabilities for deduplication, integration with DIGI locker for digital onboarding, and real-time notifications for KYC detail updates. The face matching functionality extends the country’s existing biometric authentication capabilities, which were previously implemented in UIDAI’s face authentication app. The system will also incorporate document verification directly with issuing authorities and secure storage of KYC data in digital format.
The registry will introduce new user-centric features, including view-only access for clients to monitor their KYC details and track which financial institutions have accessed their records. Customer consent will be managed through OTP or face authentication mechanisms when their KYC data is accessed, building on existing security protocols that have proven effective in preventing fraud in India’s digital banking sector.
Under the regulatory framework, financial institutions must conduct periodic KYC updates according to customer risk levels: every two years for high-risk customers, eight years for medium-risk customers, and ten years for low-risk customers. In cases where no information has changed, customers can provide self-declarations through various digital channels.
The system will maintain metadata tracking KYC record access and updates over five-year periods, making this information available to financial institutions. Notably, the registry will not charge fees for uploading KYC records.
In a related development, the National Payments Corporation of India has mandated that all UPI transaction IDs must follow a 35-digit alphanumeric format starting February 1, 2025, as part of broader efforts to standardize India’s digital payment infrastructure.
Sources: The Economic Times, Mobile ID World, Central Bank of India
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