India amends KYC rules for easier, biometric enabled authentication

The Reserve Bank of India (RBI) has amended KYC rules to streamline customer onboarding.

India’s central bank has simplified procedures to allow Aadhaar-based eKYC, video KYC and DigiLocker documents.

Now, customers may be onboarded in face-to-face mode through Aadhaar biometric based eKYC authentication, while a digital KYC process is also allowed. If the individual’s current address differs from the Aadhaar address, a simple self-declaration will suffice.

Aadhaar OTP-based eKYC authentication is another option, allowing for documents issued through DigiLocker and equivalent e-documents. Accounts opened through non face-to-face onboarding (NFTF) must complete Customer Due Diligence (CDD) within one year.

Further, the new rules allow for a video-based customer identification process (V-CIP). V-CIP is an alternate method of CDD by an authorized official who undertakes seamless, secure, live, informed and consent-based audiovisual interaction with the customer to obtain identification information required for CDD. This method is treated on par with face-to-face onboarding.

RBI’s amendments are aimed at supporting inclusive banking and easing the process for first-time customers, particularly those joining through government schemes like DBT, EBT and PMJDY.

Additional measures aim to ease the process further. These include Business Correspondents (BCs) who are now authorized to assist in onboarding and KYC updates, aimed at increasing reach in rural and remote areas.

Banks have been advised to be more lenient when reactivating accounts opened under welfare schemes, and must use the Central KYC Registry (CKYCR) to get a customer’s existing KYC record with consent. This avoids the need for repeated document submissions.

RBI has also asked banks to carry out special onboarding and KYC update camps and run targeted awareness campaigns in rural and semi-urban areas to bring more users into the formal banking system.

Aadhaar and digital KYC transactions are surging in India as the world’s largest digital ID system is powering India’s digital economy and welfare services.

Article Topics

Aadhaar  |  banking  |  biometric authentication  |  biometrics  |  identity verification  |  India  |  KYC