With immediate effect, regulated entities in IFSCs are permitted to use OTP-based Aadhaar e-KYC authentication as part of their customer onboarding and verification processes under the AML/CFT Guidelines, 2022. This inclusion expands the range of permissible KYC mechanisms within the regulatory framework, aligning digital authentication practices with statutory compliance obligations. The modification is limited to the insertion of the specified sub-point and does not otherwise alter the broader structure of the Guidelines as updated up to January 2, 2026. The circular reinforces that regulated entities must continue adhering to the existing AML and CFT standards while incorporating the newly approved authentication method where applicable. A copy of the circular has been made available on the Authority’s official website. By specifying the amendment under its statutory powers, IFSCA has clarified the regulatory position regarding digital Aadhaar-based KYC authentication within IFSC jurisdictions.
International Financial Services Centres Authority
Circular No. IFSCA-DAC/7/2024-AMLCFT | Dated: 26 February, 2026
To
All Regulated Entities in the International Financial Services Centres
Subject: Modifications under the International Financial Services Centres Authority (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022.
Sir/Madam,
A. Reference is drawn to the International Financial Services Centres Authority (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022 (hereinafter referred as ‘Guidelines’) issued vide notification IFSCA/2022-23/GN/GL001 dated October 28, 2022 and updated as on January 02,2026.
B. In exercise of the powers conferred under Section 12 r/w Section 13 of the International Financial Services Centres Authority Act, 2019, and Rule 9 (14) of Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, the Authority hereby specifies the following modification to the Guidelines:
1. After sub-point (d) to point (viii) of Clause 1.2.2 of Part -A of Annexure-II of the principal Guidelines, following new sub-point shall be inserted:
“(e) OTP based Aadhaar e-KYC authentication”
C. This Circular shall come into force with immediate effect.
D. Copy of the circular is available on the IFSCA website at https://ifsca.gov.in/Legal/Index/TCce8MyOmco=
Pradeep Deo,
Chief General Manager
Division of AML & CFT, IFSCA
