Indian banks and insurers are set to roll out a revamped Central Know Your Customer (CKYC) 2.0 system next month, allowing customers to access financial products without repeatedly submitting KYC documents, Reuters reported on Thursday, citing regulatory and industry sources.
Under the new framework, customers will only need to provide consent for banks and insurers to retrieve their verified KYC information from a central registry when opening an account or updating their details. Asset managers, mutual funds and brokerages are expected to join later this year as regulators finalise sector-specific requirements, the report said.
As India deepens participation in financial products having largely achieved basic financial inclusion, with about 89% of adults owning bank accounts in 2024 as per World Bank data, even as ownership of mutual funds, insurance and pensions remains comparatively low, according to regulatory data by Reuters.
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India has spent over a decade working on a unified digital KYC system, similar to those in Singapore and parts of Europe, where a single identity verification can be used across multiple financial products. Besides simplifying onboarding, the new platform is also expected to strengthen fraud detection.
The project is being jointly implemented by the Reserve Bank of India, the Securities and Exchange Board of India and the insurance regulator, though none of the regulators immediately responded to Reuters' queries.
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India's existing CKYC registry already holds around 1.2 billion customer records but has seen limited adoption because of concerns over duplicate and incomplete data. Under CKYC 2.0, records will include a confidence score and indicate whether the information has been verified by a financial institution. Customers will also have to authorise access through a one-time password before institutions can retrieve their details.
DP Singh, joint chief executive of SBI Funds Management, told Reuters the framework could significantly expand the industry's investor base and may be rolled out within four months. Paras Pasricha, business head at Policybazaar, said insurers are building the required capabilities, with the first phase expected to go live in August.
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