Lenders and insurance companies in India are set to begin using a unified customer verification platform in August, Reuters reported citing sources.
Fund houses are expected to be added at a later stage.
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The platform, called Central Know-Your-Customer 2.0 (CKYC), will let customers use financial services without repeatedly handing over the same identification papers.
Under the arrangement, institutions will be able to retrieve customer information from a central repository when someone opens an account or updates personal details, provided the customer gives consent.
Regulatory sources said the framework should also support fraud prevention by making oversight easier.
Brokerages and mutual fund firms are likely to come on board later this year as regulators address requirements specific to those segments, the sources said.
The Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI) and the insurance regulator, which are jointly implementing the initiative, did not immediately respond to Reuters’ emails.
India already maintains a central repository with around 1.2 billion customer records, but it has seen limited adoption because of concerns over data quality, including duplicate entries and incomplete information.
As the RBI has not accepted records drawn from that repository, investors have had to submit the same paperwork again to obtain other financial products, the report said.
In the updated system, records will include a confidence score reflecting data accuracy and will show whether the information has been verified by a financial firm.
To access those verified records, financial institutions will have to obtain customer approval through a one-time password, according to the operating guidelines document seen by Reuters.
