The objectives of KYC guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering activities. Related procedures also enable banks to better understand their customers and their financial dealings. This helps them manage their risks prudently. As you are aware, the Reserve Bank of India has, from time to time, issued a number of circulars containing policy guidelines on Issuance and Operation of Pre-paid Payment Instruments in India. This Master Circular has been prepared to facilitate the Prepaid Payment Instrument Issuers, System Providers, System Participants and all other Prospective Prepaid Payment Instrument Issuers to have all the extant instructions on the subject at one place. The Master Circular has been updated by incorporating all the instructions/guidelines issued on Issuance and Operation of Pre-paid Payment Instruments in India up to December 03, 2014 and has been placed on the RBI web- site (http://www.rbi.org.in). A list of circulars finding reference in this master circular is enclosed as Appendix. To provide a framework for the regulation and supervision of persons operating payment systems involved in the issuance of Pre-paid Payment Instruments (PPIs) in the country and to ensure development of this segment of the payment and settlement systems in a prudent and customer friendly manner. For the purpose of these guidelines, the term persons refers to entities authorized to issue prepaid payment instruments and entities proposing to issue pre-paid payment instruments. KYC is basically stands Know Your Customer. According to RBI every bank or financial institute should maintain the proper acknowledgement for the customer. We can say that The KYC will act as a hammer on the persons who can easily convert the black money to white money. Resident/ Customer visits the Kiosk Channel for opening account. e-KYC link is opened on Kiosk platform and CSP operator requests customer to provide the Aadhaar number and capture any two fingerprints for e-KYC verification. e-KYC Application invokes e-KYC Web Service of the Bank in the background. The customer inputs his / her biometrics via the fingerprint device. This data is encrypted as per NPCI guidelines and send to UIDAI's Central Identities Data Repository (CIDR). UIDAI authenticates the customer data. On successful verification, UIDAI responds with encrypted demographic information [Name, year/date of birth, Gender, Address, Phone and email (if available)] and photograph. This information is captured by bank's e-KYC Application and displays the data on the screen. CSP operator compares the photo with the customer and carries out verifications / cross- checks of personal details with the original Aadhaar letter. Now, CSP operator takes a print out and keeps it along with the account opening form subject to satisfying other account opening requirements. If the Aadhaar Number does not match with the biometrics, UIDAI server responds with an error with various reason codes depending on type of error (as defined by UIDAI). In such circumstances, CSP operator opens Small Accounts based on other KYC documents, as per extant guidelines. KYC Policy Banks should frame their KYC policies incorporating the following four key elements: Customer Acceptance Policy; Customer Identification Procedures; Monitoring of Transactions; and Risk Management.