The Reserve Bank of India issued the Reserve Bank of India (Commercial Banks – Know Your Customer) Directions, 2025 on November 28, 2025, to strengthen measures aimed at preventing money laundering and terrorist financing. The Directions emphasize India’s commitment as a member of the Financial Action Task Force (FATF) to upholding international standards for safeguarding the integrity of the financial system. They reference the domestic legal framework under the Prevention of Money-Laundering Act, 2002, and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, which require regulated entities to conduct customer identification and transaction monitoring. Exercising statutory powers under multiple enactments, including the Banking Regulation Act, the Foreign Exchange Management Act, and the Payment and Settlement Systems Act, the RBI has issued these Directions in public interest. The Directions take effect once published on the RBI website and apply to commercial banks, excluding Small Finance Banks, Payment Banks, and Local Area Banks.
RESERVE BANK OF INDIA
RBI/DOR/2025-26/169
DOR.AML.REC.No.88/14.01.002/2025-26 | Dated: November 28, 2025
Reserve Bank of India (Commercial Banks – Know Your Customer) Directions, 2025
Introduction
In order to prevent banks and other financial institutions from being used as a channel for Money Laundering (ML) / Terrorist Financing (TF) and to ensure the integrity and stability of the financial system, efforts are continuously being made both internationally and nationally, by way of prescribing various rules and regulations. Internationally, the Financial Action Task Force (FATF), which is an inter-governmental body established in 1989 by the Ministers of its member jurisdictions, sets standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. India, as a member of FATF, is committed to upholding measures to protect the integrity of the international financial system.
In India, the Prevention of Money-Laundering Act, 2002, and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, form the legal framework on Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT). The provisions of the PML Act, 2002 and the PML Rules, 2005, as amended from time to time by the Government of India, require Regulated Entities (REs) to follow certain customer identification procedures while undertaking a transaction either by establishing an account-based relationship or otherwise, and to monitor their transactions.
Accordingly, in exercise of the powers conferred by sections 35A of the Banking Regulation Act, 1949, section 10(2) read with section 18 of Payment and Settlement Systems Act 2007 (Act 51 of 2007), section 11(1) of the Foreign Exchange Management Act, 1999, Rule 9(14) of the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, and all other laws enabling the Reserve Bank in this regard, the RBI being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Directions hereinafter specified.
Chapter I – Preliminary
A. Short Title and Commencement.
1. These Directions shall be called the Reserve Bank of India (Commercial Banks – Know Your Customer) Directions, 2025.
2. These directions shall come into effect on the day they are placed on the official website of the RBI.
B. Applicability
3. These directions shall be applicable to Commercial Banks (hereinafter collectively referred to as ‘banks’ and individually as a ‘bank’).
For the purpose of these Directions, ‘Commercial Banks’ mean banking companies (other than Small Finance Banks, Payment Banks, and Local Area Banks), corresponding new banks, and the State Bank of India, as defined respectively under clauses (c), (da), and (nc) of Section 5 of the Banking Regulation Act, 1949.
Read Full text of the Notification: https://rbidocs.rbi.org.in/rdocs/notification/PDFs/169MD.pdf
