How India's banks can stay ahead in a rapidly shifting regulatory and threat landscape

UPI fraud has grown 40x in four years. The RBI has overhauled its KYC framework. FATF has rated India's AML supervision effectiveness as only "Moderate." The rules have changed and the window to act is narrowing fast.

India's financial crime landscape is moving faster than any rule-based system can keep up with. With ₹22,931 crore in UPI fraud recorded in 2025, over 8.5 lakh mule accounts uncovered and STR filings growing at 40%+ year-on-year, the scale of the challenge is unprecedented.
But it's not just the threat that has shifted. The RBI's new Commercial Banks KYC Directions 2025, the FATF Mutual Evaluation findings and India's national AI governance framework have together raised the compliance bar to a level that legacy, periodic, rules-based programmes simply cannot meet.
This whitepaper sets out exactly what India's banks are up against and the operating model that will define who leads and who falls behind.

What's inside:

• The regulatory ratchet: What the RBI's KYC Directions 2025, FATF's Mutual Evaluation findings and expanding PMLA obligations mean for your compliance programme and the specific operational gaps that will attract examiner scrutiny
• Why traditional compliance is failing: How a 95% false positive rate, 2–20 hour investigation cycles, and siloed KYC and transaction monitoring systems are creating the blind spots that regulators penalise, and criminals exploit
• The path to Always-on Compliance: Five critical capabilities - from continuous AI-driven risk assessment to multi-agent investigation orchestration - that India's leading institutions are deploying to turn compliance from a cost burden into a competitive advantage

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