{"id":8423,"date":"2023-06-16T06:19:25","date_gmt":"2023-06-16T06:19:25","guid":{"rendered":"https:\/\/signdesk.com\/in\/?p=8423"},"modified":"2025-09-17T07:16:58","modified_gmt":"2025-09-17T12:46:58","slug":"rbi-tags-ckyc-as-high-risk","status":"publish","type":"post","link":"https:\/\/melento.ai\/en-in\/blog\/rbi-tags-ckyc-as-high-risk","title":{"rendered":"RBI tags cKYC as High-Risk – Implications & Video KYC as an Alternative"},"content":{"rendered":"

cKYC Accounts To Require Enhanced Monitoring – RBI<\/strong><\/span><\/h2>\n

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In a notification dated April 28, 2023, the Reserve Bank of India (RBI) classified Centralized Know Your Customer (cKYC) as a high-risk process, sending ripples across the banking sector.<\/p>\n

This move by the central bank has raised concerns among banks and lenders, who now face the challenge of adapting to the new guidelines while ensuring compliance and mitigating risks.<\/p>\n

The notification distinguishes onboarding mechanisms that aren\u2019t face-to-face from customer identification procedures such as V-CIP (Video-based Customer Identification Process)<\/a> and mandates Enhanced Due Diligence<\/strong><\/a> (EDD) for the former.\u00a0<\/span><\/p>\n

All accounts opened via non face-to-face mechanisms, i.e., DigiLocker, cKYC, etc., must be placed under enhanced monitoring until the account holder\u2019s identity is verified via V-CIP.<\/p>\n

In this article, we will explore the RBI’s notification on cKYC and its implications for the banking sector, delve into what cKYC is and how it works, and introduce Video KYC (V-CIP)<\/a> as a promising alternative.<\/span><\/p>\n

RBI’s Notification on cKYC and Its Impact on the Banking Sector<\/strong><\/span><\/h2>\n

The RBI’s notification<\/a> <\/span>has tagged cKYC as a high-risk process. This classification stems from the need to address the potential risks associated with centralized KYC platforms. While the RBI intends to enhance the security and integrity of the KYC process, this move has created apprehension within the banking sector.<\/p>\n

Banks and lenders, who previously relied on cKYC for streamlined customer onboarding and verification, are now faced with the challenge of reassessing their risk management frameworks.<\/p>\n

This reclassification has prompted financial institutions to review their existing cKYC systems, policies, and procedures to ensure compliance with the new guidelines while effectively managing the associated risks.<\/p>\n

Key Takeaways from the RBI Notification\u00a0<\/strong><\/span><\/h3>\n

Here\u2019s a summary of what banks and NBFCs need to know about the new classification of cKYC and what it entails for customer onboarding.<\/p>\n