The RBI's KYC Master Direction 2016 sets customer acceptance, identification, beneficial-ownership and ongoing due diligence for regulated firms. Risk assessment and sanctions screening work with record retention and prescribed FIU-IND reporting, linking onboarding with monitoring.
TL;DR:
- Connects customer acceptance, identity and ownership checks with risk classification.
- Requires ongoing monitoring, records and prescribed FIU-IND reporting.
- Simplified and enhanced measures depend on risk, applicable provisions and later RBI amendments.
Summary
The RBI layer of India's AML framework
The Master Direction brings RBI's customer-identification requirements together within the wider Prevention of Money-Laundering Act and record-maintenance rules. It applies to the defined regulated entities except where a provision specifies otherwise. The official consolidated text carries amendment dates, making the version relevant when comparing the obligations that applied at different points in a customer's relationship.
Identifying the customer and beneficial owner
Customer acceptance and identification procedures are followed by due-diligence provisions for individuals, firms and other legal entities. Beneficial-ownership checks seek to identify the relevant natural persons behind a legal customer. This distinction matters for payments because the account holder's registered name, the person acting for it and the individuals ultimately owning or controlling it need not be the same. The legal form of the customer informs which identification and ownership provisions need to be consulted.
Risk and monitoring after onboarding
The direction includes ongoing due diligence as well as enhanced and simplified procedures. Customer information supports the assessment of whether activity is consistent with the relationship and its risk profile. A completed identity check is therefore only one part of the framework; monitoring and updating the relationship help a regulated institution decide how to handle later transactions and changes in the customer's circumstances.
Records, reporting and cross-border operations
Separate chapters cover record management, reporting to FIU-IND and obligations arising from international arrangements. Preserving identity and transaction evidence connects the initial checks to subsequent investigation and reporting. The text also addresses overseas branches and majority-owned subsidiaries where host-country law differs. The applicable entity, transaction and jurisdiction must be considered together rather than treating KYC as one uniform document request.
Keywords
- RBI KYC
- customer acceptance
- beneficial ownership
- risk classification
- ongoing monitoring
- identity verification
- FIU-IND reports
- record keeping
- enhanced diligence
- relationship reviews