RBI has revised its standards to permit the ‘know your customer’ (KYC) process to be completed through a mobile video discussion. The central bank has moreover encouraged eKYC and advanced KYC by permitting the use of Aadhaar or other e-documents in the customer due diligence process. The Reserve Bank of India has chosen to allow video-based KYC (Know Your Customer) as a choice to set up a customer’s identity.

For banks, non-banking money related companies, wallet benefit suppliers and other monetary substances directed by the central bank, usually anticipated coming as a relief as client authentication as opposed to onboarding clients that will help save costs.

RBI notification amending the KYC directions, with a view to leverage the digital channels for Customer Identification Process (CIP) by Regulated Entities (REs), the RBI has chosen to allow Video-based Customer Identification Process (V-CIP) as a consent-based interchange strategy of building up the customer’s identity and for customer’s onboarding.

The provision permits an officer of the financial institution to remotely vet a customer’s identity through PAN or Aadhaar cards. The agent will moreover ensure to guarantee that the customer is physically present in the nation by capturing their geo-coordinates. Further, the origin of the video call must be from the space of the concerned bank and not from a third-party source such as Google Team or WhatsApp video call. Experts said banks will have to be coordinated their applications and site with a link to start the video KYC process.

The audiovisual interaction should be activated from the space of the RE itself, and not from third-party service provider. The V-CIP process might be operated by authorities particularly prepared for this reason. The movement log, in conjunction with the accreditations of the official performing the V-CIP should be protected. Outsourced agents have not been given endorsement to perform video KYC and as it were authorities from regulated entities would be able to do the remote onboarding.

Permission to perform video KYC was a long-standing industry demand for many years, particularly Fintech new companies and computerized NBFCs which have been hindered down by the costs of physically reaching to clients in remote areas where they did not have branches. This acted as an obstruction to the development of a few businesses, particularly computerized wallet companies such as Paytm.

Credits: Economic Times