The International Financial Services Centres Authority issued a circular on October 31, 2025, introducing significant modifications to the IFSCA (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022.
The amendments, which are effective immediately, primarily focus on expanding the scope and operational framework of the Video based Customer Identification Process (V-CIP). The circular substitutes Part-A of Annexure II of the guidelines, providing a detailed new process for onboarding Indian nationals and, for the first time, a pilot program for Non-Resident Indians (NRIs)
Key Modifications
1. Expanded V-CIP Responsibility
The circular widens the scope of who can conduct the V-CIP. The definition has been amended to allow the process to be undertaken not only by an official of the Regulated Entity (RE) but also by:
- A financial group entity in India supervised by a financial regulator; or
- A KYC Registration Agency (KRA).
Despite this delegation, the circular clarifies that the Regulated Entity remains ultimately responsible for the customer due diligence
2. New V-CIP Framework for Indian Nationals
The circular substitutes the existing V-CIP process with a more detailed framework. Regulated Entities must adhere to minimum standards for both infrastructure and procedure.
Key Infrastructure Requirements:
- Technology: The V-CIP infrastructure must be housed within the RE’s premises, its financial group, or a KRA. It must also have capabilities to prevent connections from spoofed IPs, VPNs, or proxy servers. For resident Indian customers, the IP address must emanate from India.
- Data Security: The RE or its Financial Group must retain ownership of all data, even when using a cloud deployment model. All data and recordings must be transferred to the RE’s servers immediately after the process, with no data retained by any third-party provider.
- Security & Audits: The infrastructure must use anti-deep fake and anti-fraud AI. It must also undergo Vulnerability Assessment and Penetration Testing (VAPT) conducted by CERT-In empaneled auditors before implementation and periodically thereafter.
Key Procedural Requirements
· Identification: The RE’s official must capture a live audio-video, photograph of the customer, and identification information using methods like Offline Aadhaar verification, KYC records from CKYCR or a KRA, or equivalent e-documents from Digilocker.
· PAN Verification: A clear image of the customer’s PAN card must be captured (unless an e-PAN is provided) and verified online with the issuing authority.
· Timeline: If the V-CIP is not completed in one seamless session, the video process must be undertaken within three working days of obtaining the identification information (e.g., from CKYCR or Aadhaar).
3. Pilot Program for NRI V-CIP
The most notable change is the introduction of a V-CIP process for onboarding low-risk NRI customers. This is being launched as a pilot phase of 4 months.
- Eligible Jurisdictions: The V-CIP is restricted to NRIs residing in 11 specified jurisdictions: USA, Japan, South Korea, UK (excluding overseas territories), France, Germany, Canada, UAE, Singapore, Australia, and the European Union (excluding Croatia) .
- IP Address Rule: The RE must ensure the NRI customer’s IP address emanates from the jurisdiction specified in the current address proof they submit.
- Account Activation (Debit Freeze):
1. The RE must also capture the NRI’s bank account details from a bank in that same eligible jurisdiction.
2. Upon successful V-CIP, the customer’s account is opened but kept in debit freeze mode.
3. The account is only made fully operational (i.e., the debit freeze is lifted) after the RE receives and verifies the first credit into the account from the foreign bank account that the customer provided as proof of address
You can access the full circular here.
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