RBI update allows offline Aadhaar for Indian bank KYC checks with customer consent

Indian banks can now use customer Aadhaar numbers to verify them according to know your customer (KYC) guidelines, after the Reserve Bank of India (RBI) amended its regulations to allow offline Aadhaar authentication on a voluntary basis, MediaNama reports. Offline verification does not involve biometric authentication.

An ordinance passed by the Cabinet earlier this year specified how and in what situations an Aadhaar number could be used as an identification document.

The “master direction” from the RBI says banks should collect Aadhaar details and perform e-KYC authentication for benefit or subsidy claims, and for other customers should obtain a certified copy of any officially valid document, such as Aadhaar, that has identity details, an address, and a recent photograph. Regulated entities are also responsible for making sure non benefit-receiving customers black out their Aadhaar number when submitting the document for customer due diligence. Non-bank registered entities can also now use offline Aadhaar verification with customer consent.

Accounts can now also be opened remotely with e-KYC authentication and one-time password, though an in-person verification would need to be completed within a year.

Rules for identification documents without a current address, tax ID links, and company accounts are also among the updates.

The government is also reported to be considering opening up Aadhaar’s biometric eKYC authentication facility to fintechs.

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