India's New CKYC System: One ID for All Financial Services from August
India is set to launch a unified customer identification system, Central Know-Your-Customer 2.0 (CKYC), starting with banks and insurers in August 2025. Mutual funds and other capital market firms are expected to join later this year, according to regulatory sources and industry executives.
The system aims to eliminate the need for customers to repeatedly submit identification documents when accessing different financial products. Instead, with a one-time consent, financial institutions can fetch verified data from a Central Registry that already holds about 1.2 billion records.
Regulatory sources, who declined to be named as they are not authorised to speak to the media, said the move follows more than a decade of efforts to create a digital identity framework similar to those in Singapore and several European nations. Such systems allow customers to access multiple financial products through a common verification process, while also helping combat fraud through easier monitoring.
The Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and the Insurance Regulatory and Development Authority (IRDAI) are jointly executing the project. None of the regulators responded immediately to requests for comment.
The initiative is intended to deepen participation in financial products after India largely achieved basic financial inclusion. World Bank data for 2024 shows about 89% of adults owned bank accounts, but regulatory data indicates ownership of mutual funds, insurance, and pensions remains comparatively low.
Under the new framework, records in the Central Registry will carry a confidence score indicating the accuracy of the data and whether a firm has verified it. Financial institutions will need to seek customer consent via a one-time password to access these records, according to operating guidelines seen by Reuters.
Rakesh Dosi, Chief Business and Product Officer at Protean eGov Technologies, which is building the system, explained: “The accuracy score wouldn’t just provide consented data, but through this matrix it will also tell them how much to trust it.”
D.P. Singh, Joint Chief Executive of SBI Funds Management, said CKYC could substantially expand the industry’s investor base. He noted that SBI, the country’s largest bank, has 500 million bank accounts, and “even if a fraction of eligible customers begin investing after universal customer identification, the upside will be significant.” He added that the framework could be rolled out for the industry within four months.
Paras Pasricha, Business Head at Policybazaar, said records can be updated in near real-time. “Insurance companies are in the process of building capabilities, and we are expecting something to come up by the end of July, and in August some phase of it should go live,” he said.
