The fintech ecosystem believes that the new RBI move, applicable to non-banking finance companies (NBFCs), payment system providers and payment system participants, will make it cheaper and safer to offer financial services to customers digitally
The core concern with the use of digital data assets lies in the safety and security of user data and the RBI has been taking measures to address the digital data collection and processing mechanisms
In 2019, the finance ministry had come out with a detailed procedure for processing of applications (under the Prevention Of Money Laundering Act) for use of Aadhaar authentication services by entities other than banking companies
The Reserve Bank of India (RBI) has invited applications from a number of different non-banking participants in the lending and payment ecosystem looking to obtain an Aadhaar e-KYC licence. The Indian fintech ecosystem has welcomed the move.
In May 2019, the finance ministry had come out with a detailed procedure for processing of applications (under the Prevention Of Money Laundering Act) for use of Aadhaar authentication services by entities other than banking companies. As per provisions of Section 11A of the Act, entities other than banking companies may be permitted to authenticate a client’s Aadhaar number using digital Know Your Customer (e-KYC) facility provided by the Unique Identification Authority of India (UIDAI), if permitted by the central bank. The move will be applicable to non-banking finance companies (NBFCs), payment system providers and payment system participants.