Digital KYC for CASA Accounts: RBI Rules and Process for Banks (2026)

Quick answer: Banks can now open current and savings accounts (CASA) without paper forms or branch visits by verifying customers digitally. In India, the RBI's KYC Directions allow Aadhaar-based e-KYC, DigiLocker documents, records from the Central KYC Records Registry (CKYCR), and video KYC (V-CIP), each with its own rules. Done well, digital KYC cuts onboarding from days to minutes while meeting the same anti-money laundering obligations.

CASA stands for current account and savings account. It isn't a single account type: it refers to a bank's current and savings deposits together. These deposits pay little or no interest compared with term deposits, so they are a low-cost source of funds, and a bank's CASA ratio, the share of CASA in its total deposits, is a closely watched measure of funding cost. That makes fast, compliant account opening a priority for banks.

Banks and regulators have focused on eradicating terrorist funding and money laundering. The objective is to prevent financial terrorism related activities. It’s impossible to transfer funds around the world and within a country without using a financial institution. As such, banks have increased their efforts to prevent, detect and report suspicious transactions. These include financial transactions that are connected with money laundering and terrorist financing. Digital banking KYC verification is a critical component to anti-money laundering efforts.

Need For KYC In CASA WorldWide

India

As per RBI regulations on KYC, the objective of KYC/AML-CFT guidelines is to protect banks or Financial Institutions (FIs). This prevents them from being used by for money laundering or terrorist financing activities. KYC procedures also enable banks and FIs to know and understand their clients. This helps in their financial dealings better, and so manage their risks prudently.

KYC is a fundamental part of the banking process. KYC regulations are non-negotiable and non-optional. This applies to retail banking as well as corporate banking,

KYC for a CASA account covers:

• Identity: an officially valid document (OVD) such as a passport, driving licence, or voter ID, Aadhaar used voluntarily, or an equivalent e-document, plus PAN or Form 60
• Address: usually from the same document
• Customer due diligence: understanding the customer's occupation and expected activity, and assigning a risk category
• For businesses: proof that the entity exists and is registered, identification of beneficial owners, and KYC on the people authorized to act for it

Paper-based KYC was slow and costly: physical forms, copies of documents, in-person verification, and manual checks. Digital KYC lets banks fetch or verify most of this information electronically, with the customer's consent, instead of collecting it on paper.

USA

In 2016, FinCEN issued the Customer Due Diligence (CDD) Rule, which has applied since May 2018. It requires banks to identify and verify the beneficial owners of legal entity customers: each individual who owns 25% or more, plus one individual who controls the entity.

If you’re a beneficial owner of a legal entity, the following personal information must be furnished that includes:

• Full legal name

• Date of birth

• Current residential address

• Social security number (SSN) or other government issued identification number for US citizens

Banks and other financial institutions must procure this information. This is because it’s a regulatory compulsion. It attempts to prevent, detect and report money laundering and terrorist financing activity.

For instance, while opening a new account and collecting key KYC information, a bank may find through open source record checks that an individual/business had defrauded innocent investors previously, or was part of a global criminal network. This information may hint that this potential client could be an elevated money laundering risk.

In September 2026, FinCEN and the federal banking agencies confirmed that banks may accept mobile driver's licenses and other government-issued verifiable digital credentials for identity verification under the Customer Identification Program rule, which makes fully digital account opening easier.

Europe:

Europe has tightened its anti-money laundering rules repeatedly over the past decade through the Fourth, Fifth, and Sixth Anti-Money Laundering Directives. The next step is a single rulebook: the EU AML Regulation applies from July 10, 2027, and the new EU Anti-Money Laundering Authority (AMLA), operational since July 2025, is drafting detailed customer due diligence standards.

Digital identity is changing too. Under the revised eIDAS Regulation, every member state must offer a European Digital Identity Wallet by the end of 2026, and from December 2027 banks that require strong customer authentication must accept it when a customer chooses to use it. GDPR continues to govern how banks handle the personal data they collect during KYC.

KYC Methods In CASA For Banks

Under the RBI's KYC Directions, each bank's Board-approved KYC policy must cover four elements:

a) Customer Acceptance Policy–

To make sure that explicit guidelines are applicable to the acceptance of customers.

b) Customer Identification Procedures–

To efficiently identify the customer. This helps to verify his/her identity. This can be done with reliable, independent methods of documents, data or information.

c) Monitoring of Transactions– This policy observes the standard activity of the customer. It can then mark transactions that fall outside the regular pattern of activity.

d) Risk management– Establish appropriate protocols as well as implicate their effective implementation.

As part of the Know Your Customer policy, a Customer/user may be defined as:

• A person or entity that possesses an account and/or maintains a business relationship with the banking institution
• The person on whose behalf the account is maintained (i.e. the beneficial owner)
• Beneficiaries of transactions which are carried out by professional intermediaries. These can be stockbrokers, Chartered Accountants, or solicitors etc.
• Any person or entity involved with a suspicious financial transaction. This can have significant impact on reputation or other risks to the banking institution. For instance, a wire transfer or issue of a high-value demand draft as a single transaction.

Going paperless — Digital KYC verification

Paperless KYC lowers the cost of opening each account. Video KYC adds a further benefit: the whole process can be done remotely, without a visit to the customer or a branch.

That makes it especially useful for financial inclusion, because banks can onboard customers in remote areas at low cost. Automation also helps behind the scenes, for example machine learning to reduce false positives in watchlist screening and automated checks on documents and data.

Digital KYC Rules for Banks in India (2026)

The RBI's current framework for commercial banks is the Reserve Bank of India (Commercial Banks – Know Your Customer) Directions, 2025, issued on November 28, 2025, which replaced the earlier KYC instructions for those banks. The main digital routes for opening a CASA account are:

• Aadhaar OTP-based e-KYC: for accounts opened remotely this way, with the customer's consent, total balances across the customer's deposit accounts can't exceed ₹1 lakh and total credits can't exceed ₹2 lakh in a financial year. Full customer due diligence, in person or through V-CIP, must be completed within one year, or the account must be closed.
• Video-based Customer Identification Process (V-CIP): a live, consent-based video interaction with a trained bank official, with liveness checks, geo-tagging, and secure recording. A compliant V-CIP is treated on par with face-to-face identification. Our video KYC guide covers the requirements.
• CKYCR: banks retrieve the customer's existing KYC record from the Central KYC Records Registry instead of asking for the same documents again, and upload new records within 10 days. A December 2025 amendment clarified that the entity that last uploaded or updated a record is responsible for having verified it.
• DigiLocker and other e-documents: digitally signed documents issued to the customer's DigiLocker account count as equivalent e-documents once the bank verifies the digital signature.

In August 2025, the RBI also recognized Aadhaar face authentication and required liveness checks to remain accessible to people with disabilities.

Periodic KYC Updates and Basic Savings Accounts

• Re-KYC intervals: at least every 2 years for high-risk customers, every 8 years for medium-risk customers, and every 10 years for low-risk customers. Low-risk individuals whose update falls due can keep transacting until one year after the due date or June 30, 2026, whichever is later. Customers can often confirm there are no changes through digital banking or other registered channels, or update KYC through Aadhaar OTP or V-CIP.
• Inoperative accounts: since June 2025, banks must allow KYC updates for reactivating inoperative accounts at any branch, not just the home branch, and should offer V-CIP for it.
• Basic Savings Bank Deposit Accounts (BSBDA): revised terms effective April 1, 2026 provide for no minimum balance or initial deposit, a free debit card, and at least four free withdrawals a month, with digital payments such as UPI not counted toward that limit. Standard KYC still applies.

Regulatory Authorities Around the Globe for KYC

The following highlights the major regulators around the world. They develop, recommend and implement KYC and AML compliance around the world:

FATF (Financial Action Task Force) sets the international AML/CFT standards. Its own membership is small, but its recommendations apply across more than 200 jurisdictions through FATF and its regional bodies.

FinCEN (Financial Crimes Enforcement Network) is a bureau of the USA treasury department. It collects the financial transactions data. It uses this data for financial crime mitigation and international level.

FINTRAC (Financial Transactions and Report Analysis Center) is a regulatory authority in Canada. It analyzes the financial crime data and works on the detailed implementation of KYC and AML rules in Canada.

FINMA is a financial regulatory authority in Switzerland. It oversees banks, insurance companies, stock exchanges, etc. The authority oversees KYC/AML regulations. This applies to all the institutions liable for regulatory compliance.

AMLA (Anti-Money Laundering Authority) is the EU's new AML authority, based in Frankfurt and operational since July 2025. It will directly supervise some of the highest-risk financial institutions and coordinate national supervisors.

Real KYC & VideoKYC For CASA

At Signzy, we have developed 2 proprietary Digital KYC products. They offer the perfect solution for onboarding savings and current accounts — Real KYC & VideoKYC. Here are some benefits:

• No extra cost to customers: Customers aren't charged for digital KYC; the bank covers the cost of the verification system.
• Faster processing: The RealKYC service is an automated online process. This implies that KYC information can be transferred in real-time and does not require any manual intervention. The paper-based KYC process can be delayed for days and go up to weeks to get verified. Using the RealKYC process reduces this to just a few minutes to verify and issue.
• Account opening in less than 2 minutes: Signzy’s VideoKYC product is capable of onboarding a new CASA account in less than 2 minutes.
• Encrypted VideoKYC sessions: Calls between customers and verifying officials are encrypted end to end.

About Signzy

Signzy provides KYC, video KYC, and AML APIs that banks use to open accounts digitally, including India-specific checks through its India API marketplace. For the wider onboarding picture, see our guides to digital onboarding and how banks verify identity online.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

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Signzy

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