RBI recently issued a Master Direction on KYC in May 2023. The circular provides guidelines and instructions to regulated entities on the implementation of KYC procedures.

The changes in the policies and procedures are aimed at enhancing the effectiveness of KYC procedures in identifying and mitigating money laundering and terrorist financing risks. These changes were needed to align with evolving regulatory standards and address potential vulnerabilities in the existing KYC framework.

Highlights of a few critical impacts of KYC changes on Regulated Entities covers:
-KYC Policies related to Reporting Entities (REs) 
-Customer Acceptance Policy: Suitable systems should prevent customers’ identities from matching with names on sanctions lists
-Money Laundering or Terrorist Financing: filing suspicious transaction report
-Customer Identification Procedure (CIP): International money transfers require customer identification even for non-account holders.
-Compliance with RBI guidelines on cybersecurity and having a secure V-CIP infrastructure.