The International Financial Services Centres Authority (IFSCA) has its 2022 guidelines for anti-money laundering (AML), counter-terrorism financing (CTF) and know your customer (KYC). The expand the scope and application of the AML, KYC and CTF framework to all regulated entities licensed or authorised by the IFSCA, while empowering the regulator to exempt specific activities or entities where appropriate.
The update also includes formal recognition and inclusion of KYC registration agencies under the IFSCA (KYC Registration Agency) Regulations, 2025, in the main guidelines, which gives regulated entities access to centralised KYC utilities.
Regulated entities are now barred from disclosing customer risk categorisation, or the reasons behind it, to prevent tip-offs. Enhanced due diligence has also been mandated where the beneficial owner of an entity is an Indian national, regardless of the customer’s overall risk rating, to address concerns related to round-tripping and cross-border fund flows.
Categorising risk related to a customer remains unchanged and applies to the new rules as well.
The authority has refined rules around periodic KYC updates for resident Indian customers who already have an existing relationship within a financial group in India. High-risk customers will require KYC updates every two years, medium-risk customers every eight years and low-risk customers every 10 years, with the stricter standard prevailing where risk assessments differ.
Digital onboarding and verification have received a further push that includes Aadhaar face authentication, and the acceptance of equivalent electronic documents.
The scope of video customer identification procedures has been widened for low-risk non-resident Indians from select jurisdictions, although accounts may initially operate in debit freeze or inactive mode pending verification of addresses. The circular also consolidates earlier exemptions and guidance to balance robust financial crime controls with the ease of doing business in 含羞草社区 international financial hubs.
