RBI Amends Regional Rural Banks KYC Directions to Include FPIs in Certified Copy Facility

Overview

The Reserve Bank of India has issued the Reserve Bank of India (Regional Rural Banks – Know Your Customer) Amendment Directions, 2026, effective September 18, 2026. This amendment brings a meaningful update to the existing KYC framework governing Regional Rural Banks (RRBs) by extending a previously limited facility — the alternative certified copy mechanism — to a new category of customers: Foreign Portfolio Investors (FPIs).

Until this amendment, the alternative certified copy facility under the RRB KYC framework was available exclusively to Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs). The updated directions now bring FPIs within the fold of this provision, aligning the treatment of this class of investors with that already accorded to NRIs and PIOs under the relevant paragraph of the 2025 Directions.

Statutory and Regulatory Background

The amendment draws its authority from a cluster of enabling statutes, reflecting the multi-layered regulatory architecture governing KYC compliance in India:

  • Section 35A of the Banking Regulation Act, 1949, including its application under the Banking Regulation Act (AACS), 1949 read with Section 56 of that Act
  • Section 10(2) read with Section 18 of the 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

The underlying KYC framework itself — the Reserve Bank of India (Regional Rural Banks – Know Your Customer) Directions, 2025, dated November 28, 2025 — was framed in compliance with the Prevention of Money Laundering Act, 2002 and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005.

The RBI has stated, in exercise of the above powers, that it is satisfied that issuing these amendment directions is necessary and expedient in the public interest.

What the Amendment Changes

The Provision Being Modified

The amendment specifically targets paragraph 4(1)(v) of the Reserve Bank of India (Regional Rural Banks – Know Your Customer) Directions, 2025. This paragraph governs the procedure for obtaining a "Certified Copy" in the context of KYC documentation.

Pre-Amendment Position

Under the existing Directions, the concept of a "Certified Copy" required an authorised officer of the bank to compare the copy of:

  • The proof of possession of an Aadhaar number (where offline verification is not feasible), or
  • Any officially valid document produced by the customer