Common customer ID for banks, insurers soon; mutual funds to follow
Indian regulators are launching a unified Central Know-Your-Customer (CKYC) 2.0 system in August to streamline identity verification across banks and insurance firms. This digital framework aims to simplify access to financial products and improve fraud monitoring by allowing institutions to share verified customer data with consent.
Why it matters
This initiative is a significant step toward increasing financial inclusion in India by reducing the administrative burden on consumers and improving data integrity across the financial sector.
Banks and insurers will launch a common customer identification system in August, with asset managers joining later, two regulatory sources and industry executives said, allowing customers to access financial products without separately submitting identification documents.
The new system, known as Central Know-Your-Customer 2.0 (CKYC), will only require the customer’s consent for these institutions to fetch data stored at a Central Registry when opening an account or updating their details.
“India has spent more than a decade trying to create a system similar to those in countries such as Singapore and several European nations, where digital identity frameworks allow customers to access multiple financial products through a common verification process. It will also help combat fraud through easier monitoring,” the regulatory sources said.
“Capital markets firms, including mutual funds and brokerages, are expected to be able to use it later this year as regulators work through sector-specific requirements,” they said.
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