Inclusive Digital KYC: A Necessity or a Reform?
India’s digital transformation has streamlined the entire banking and financial services through Aadhaar, e-KYC, and video-based verification[1]. However, these systems have posed severe barriers for persons with disabilities, particularly acid attack survivors with facial/ eye disfigurements and individuals with blindness. Recognising this, the Hon’ble Supreme Court in Pragya Prasun & Ors. vs. Union of India issued a landmark judgment on 30th April 2025, mandating inclusive reforms in KYC processes. In this regard, the Securities Exchange Board of India had earlier issued a circular no. SEBI/HO/MIRSD/SECFATF/P/CIR/2025/74 dated 23rd May, 2025, directing all its intermediaries to comply with the said Supreme Court Order. Now, on 14th August, 2025, the Reserve Bank of India has issued a notification no. RBI/2025-26/74, wherein it has directed that all regulated entities shall mandatorily undertake appropriate measures in this regard.
Background:
Two writ petitions were filed before the Apex Court- one by acid attack survivors who suffer from facial disfigurement and severe eye burns, and another by a person with 100% blindness, wherein it was submitted as follows:
(i) the petitioners have experienced difficulties in completing the digital KYC/ e-KYC process due to their inability to click a “live photograph” by blinking, which has prevented them from opening a bank account and purchasing a SIM card from the telecom providers.
(ii) the petitioners face daily challenges in establishing account-based relationships, conducting transactions, availing services and verifying his identity – whether as a customer or as a citizen accessing government schemes, primarily because digital KYC/ e-KYC/ video KYC norms are not designed keeping in view the accessibility needs of persons with disabilities.
The petitioners accordingly prayed for formulation of appropriate rules and guidelines for conducting Digital KYC/ e-KYC / Video KYC process through alternative methods, with a view to ensuring that the process is more inclusive and accessible to all persons, in accordance with the provisions of the Rights of Persons with Disabilities Act, 2016, Rights of Persons with Disabilities Rules, 2017, and Article 21 of the Constitution of India. Further, the petitioners sought that adequate measures are undertaken to guarantee accessibility and provide reasonable accommodations for persons with disabilities, in accessing financial services, telecommunications, and government schemes.
Discussion on Law:
The Supreme Court’s relied on the following key provisions:
1.Article 14 and Article 21 of the Indian Constitution provides for right to equality, right to life and dignity respectively.
2. India, as a signatory to the United Nations Convention on the Rights of Persons with Disabilities, 2006, is bound to promote, protect and ensure the full and equal enjoyment of all human rights and fundamental freedoms by all disabled persons.
3. The Rights of Persons with Disabilities Act, 2016 read along with the rules therewith stipulates the rules for accessibility.
4. The various initiatives taken for specially abled:
(i) National Policy on Universal Electronic Accessibility released by the Government of India in 2013 aimed to eliminate discrimination on the basis of disabilities as well as to facilitate equal access to electronics and Information and Communication Technologies.
(ii) Department of Empowerment of Persons with Disabilities launched the Accessible India Campaign (Sugamya Bharat Abhiyan) as a nation-wide initiative to achieve universal accessibility for Persons with Disabilities on December 3, 2015.
The Final Verdict:
Reserve Bank of India, Securities and Exchange Board of India, Pension Fund Regulatory & Development Authority, Insurance Regulatory and Development Authority of India and other authorities, who were respondents in the matter, contended that the digital KYC is optional and the persons can also undergo physical KYC in case of difficulties. However, the Supreme Court observed that barriers do exist, which amount to a denial of equal access and violate the accessibility mandates under the RPwD Act, 2016. It further relied on several judgments[2] which affirmed and strengthened the rights of persons with disabilities, and directed as follows:
(i) Governments and private entities must ensure that digital services comply with Web Content Accessibility Guidelines[15] and other accessibility standards.
(ii) Legal frameworks, including KYC guidelines, should be revised with accessibility at the core.
(iii) All regulated entities must mandatorily undergo periodical accessibility audit by certified accessibility professionals and involve persons with blindness in user acceptance testing phase while designing any app or website or in case of any new feature being launched.
(iv) KYC templates or customer acquisition forms to capture disability type and percentage of the customer and appropriately record as part of the account records so as to provide them accessible services or reasonable accommodations.
(v) Options for sign language interpretation, closed captions, and audio descriptions to be provided and, alternative formats including Braille, easy-to-read formats, voice-enabled services, to be adopted to disseminate government notifications and deliver public services.
(vi) All regulated entities should procure or design devices or websites/ applications/ software in compliance of accessibility standards for ICT Products and Services as notified by Bureau of Indian Standards.
(vii) Establishment of a dedicated helplines offering step-by-step assistance in completing the KYC process and a dedicated grievance redressal to report issues.
(viii) Establishment of a mechanism for human review of rejected KYC applications.
(ix) RBI shall routinely initiate public campaigns to raise awareness about alternative methods of conducting Digital KYC/ e-KYC and mandate all regulated entities to display notices containing such information.
(x) Inclusion of disability awareness and training modules as part of e-learning modules for officials of regulated entities for better sensitization of officials.
Concluding remarks:
The court observed that there are no adverse remarks regarding the petition and the authorities are committed to assist in arriving at a just and effective solution to advance the rights and enhance the quality of life of persons with disabilities. However, they should frame guidelines considering all the hypothetical scenarios and all the “ifs and buts”, such as what if a person was completely abled at the time of initiation of KYC or at time of initiating an account based relationship with the financial institution, and later due to an unfortunate event becomes specially categorised. The authorities may also consider indulging in artificial intelligence to minimise the regulatory gaps.
[2] Rajive Raturi v. Union of India & Others 2024 INSC 858, In Re: Recruitment of visually impaired in Judicial Services 2025 SCC OnLine SC 481, In Re: Distribution of Essential Supplies and Services During Pandemic 2021 SCC OnLine SC 339 and Disabled Rights Group & Another v. Union of India & Ors. (2018) 2 SCC 397
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