India's financial regulators are launching a common customer identification system that could fundamentally change how Indians buy insurance. Starting August 2026, banks and insurers will begin rolling out Central Know-Your-Customer 2.0 (CKYC) — a system that lets customers access financial products without repeatedly submitting identification documents.
Read more: Bima Sugam Countdown: What to Expect as Full Launch Nears.What is CKYC 2.0?
CKYC 2.0 is a consent-based digital identity framework. When you open an insurance policy or bank account, the institution fetches your verified KYC data from a central registry — but only after you explicitly consent via a one-time password. No more photocopies, no more notarized documents, no more repeated submissions of the same Aadhaar and PAN details to every insurer you approach.
India already has a central KYC registry containing about 1.2 billion customer records. However, its wider use has been restricted due to data quality concerns — duplication, missing details, and lack of verification. Under CKYC 2.0, records will carry a confidence score indicating accuracy, and only verified data will be accessible.
What This Means for Insurance Buyers
For the insurance industry, CKYC 2.0 addresses one of the biggest friction points in policy issuance: onboarding. Currently, buying an insurance policy involves filling proposal forms, submitting ID and address proof, and in some cases undergoing separate verification for each insurer. With CKYC 2.0, a customer who already has a bank account with verified KYC can buy an insurance policy from any insurer with a single consent — reducing onboarding time from days to minutes.
This is particularly significant for term life and health insurance, where the KYC process can be a barrier to purchase. Policybazaar's business head Paras Pasricha has said that insurance companies are building capabilities and expect some phase to go live by August 2026.
CKYC 2.0 vs Bima Sugam
Bima Sugam is an industry-owned marketplace where customers can compare products of all insurers on price and service parameters on a single screen. CKYC 2.0 is the identity layer that makes such a marketplace work seamlessly. Together, they create a powerful combination: Bima Sugam gives you choice, CKYC 2.0 gives you speed. A customer could theoretically compare term plans from 24 life insurers on Bima Sugam and buy one in under five minutes — all without submitting a single document.
Fraud Prevention and the Confidence Score
The confidence score is the system's most innovative feature. Each customer record carries a score indicating how reliable the data is and whether a financial institution has verified it. When an insurer accesses a record with a high confidence score, the underwriting risk around identity fraud drops significantly. The system also makes it harder for fraudsters to maintain multiple identities across different financial institutions, since all activity routes through a single verified identity.
The Reserve Bank of India, Securities and Exchange Board of India, and IRDAI are jointly executing the project. Mutual funds and brokerages are expected to join later in 2026 as sector-specific requirements are finalized. For insurance buyers, the message is clear: the friction of buying insurance is about to drop dramatically.
Sources: Reuters, Economic Times (July 24, 2026), IRDAI, RBI