RBI approves Aadhaar-based video authentication as alternative to e-KYC

Video KYC will have to be verified through Aadhaar.

Economy & Policy : The Reserve Bank of India (RBI) on Thursday allowed video-based authentication as an alternative to the accepted e-KYC (know-your-customer) practices, but such verification will be Aadhaar-based, either online or offline.

The need for video-KYC was proposed in the report of the Expert Committee on Micro, Small and Medium Enterprises, headed by UK Sinha, former chairman of the Securities and Exchange Board of India (Sebi) in June last year.

The panel observed that currently for conducting even e-KYC, the customer has to be physically present and the whole process takes lots of data handling.

On the other hand, in video-KYC, the whole process can be done simply through a video chat where the customer can display documents. Such video-KYC can be done through Google Duo or Apple FaceTime, the committee had recommended.

However, experts pointed out that considering these applications were of foreign origin, the RBI would unlikely allow them. Under the data protection Bill, the central bank is unwilling to let companies store customer data in foreign locations.

The RBI master direction did not mention what application can be used for video chat. But experts say it is likely that the government will have to develop such an app specifically for video-KYC whose servers will be located onshore. The RBI accepted the recommendations and amended its master direction on KYC.

Paytm Payments Bank resumes customer on-boarding after RBI's go-ahead

Company's founder Vijay Shekhar Sharma on Tuesday morning tweeted asking users to open saving accounts at the payments bank.

Paytm Payments Bank, which was asked to halt on-boarding of new customers six months ago, is learnt to have resumed the process for signing up new customers after receiving the go-ahead by the Reserve Bank of India.

Company’s founder Vijay Shekhar Sharma on Tuesday morning tweeted asking users to open saving accounts at the payments bank. “India’s most sincere bank is here. Welcome 2019 with revolutionary banking of Paytm Payments Bank,” Sharma tweeted an advertisement which has been placed in several newspapers.

Back in June, after an audit it had done, the RBI had found lapses in the KYC process employed by Paytm Payments Bank. It also raised concerns around the sharing of financial data of Indian users between One97 Communications, a majority foreign owned firm, and Paytm Payments Bank.

The Central Bank had also raised concerns on the credentials of Renu Satti, the then chief executive officer at Paytm Payments Bank, for leading the banking arm.

Satti later on stepped down from the role which was filled up by Satish Kumar Gupta who joined as managing director and CEO in last October. Gupta was earlier the chief product officer at National Payments Corporation of India.

Another player in the sector, Fino Payments Bank which was also barred by the RBI from opening fresh accounts resumed the process in October last year after a fresh directive.

Paytm Payments Bank, launched in November 2017, competes with Airtel Payments Bank, Fino Payments Bank and India Posts Payments Bank.

Business Standard