India is set to launch a unified customer identification system for banks, insurers, and eventually mutual funds, a move that promises to streamline financial access and reduce fraud. Known as Central Know-Your-Customer 2.0 (CKYC), the system will allow customers to open accounts or update details across institutions using a single consent-based data fetch from a central registry, according to regulatory sources and industry executives. Main Developments The rollout is scheduled for August, starting with banks and insurers, while capital market firms—including mutual funds and brokerages—are expected to join later this year as regulators address sector-specific requirements, sources said. The system requires customer consent via a one-time password before institutions can access verified records, according to an operating guidelines document reviewed by Reuters. Read also: 3 forces behind the rupee's modest gain as oil surges past $100 Records in the new system will carry a confidence score indicating data accuracy and whether a firm has verified the information, addressing long-standing quality concerns. The Reserve Bank of India, the Securities and Exchange Board of India, and the insurance regulator are jointly executing the project; none responded to Reuters queries immediately. Background India has pursued a common digital identity framework for over a decade, aiming to replicate systems in Singapore and several European nations where customers access multiple financial products through a single verification process. The country already maintains a central registry containing roughly 1.2 billion customer records, but it has been underutilized due to data quality issues including duplication and missing details. Previously, the RBI did not accept records sourced from the registry, forcing investors to repeatedly submit the same documents when accessing different financial products. The new CKYC 2.0 framework aims to eliminate this redundancy by providing a verified, consented data-sharing mechanism. Why It Matters While India has achieved near-universal basic financial inclusion—89% of adults owned bank accounts in 2024, per World Bank data—participation in mutual funds, insurance, and pensions remains comparatively low, regulatory data show. The CKYC system could substantially expand the investor base, said DP Singh, joint chief executive of SBI Funds Management, India's largest asset manager. State Bank of India alone holds 500 million bank accounts; Singh noted that even a fraction of those customers beginning to invest after universal customer identification would yield significant upside. The system also helps combat fraud through easier monitoring, regulatory sources said. What's Next Insurance companies are building capabilities, with a partial go-live expected in August, according to Paras Pasricha, business head of Policybazaar, India's largest insurance marketplace. The mutual fund industry could see the framework rolled out within four months, Singh added. Rakesh Dosi, chief business and product officer of Protean eGov Technologies—the company building the system—said the accuracy score will tell institutions not just the data but how much to trust it. The timeline for full implementation across all sectors remains contingent on regulators completing sector-specific requirements.