RBI Aims To Quicken Account Opening Process – Allows eKYC Via OTP

The Reserve Bank of India (RBI) has made changes to its know your customer (KYC) rules for opening a new bank account. The amendment now allows banks to open new accounts and perform electronic KYC using one time pins (OTPs) on mobile phones.

In a notification on its website, RBI stated, “It has been decided to allow One Time Pin (OTP) based e-KYC subject to certain restrictions.”

Talking about the decision, Rohit Lohia- COO, co-founder, CoinTribe said, It is a much awaited and a welcome move by RBI. While the restriction on amounts make this currently applicable for small accounts, CD financing and Payment Bank Accounts, this is indicative of RBI building comfort in steps on OTP based e-KYC. It will bring in a lot of efficiency in banking and we look forward to relaxation of the limits especially on lending for loans that are disbursed into a already ‘KYC’ed bank account.”

The amendment states that there must be a specific consent from the customer for authentication through OTP. However, the aggregate balance of all the deposits in these accounts should not exceed INR 1 Lakh. Also, the aggregate of all credits in a financial year, in all the deposit taken together, shall not exceed INR 2 Lakh. For loan accounts, only term loans shall be sanctioned, using eKYC and the amount for these term loans shall not exceed rupees INR 60,000 in a year.

The RBI also stated that for the accounts, opened using OTP based eKYC need to have their Customer Due Diligence (CDD) procedure a completed within a year. If the CDD procedure is not completed within a year, the accounts will be closed.

After the introduction of demonetisation on November 8th, the government to ease the ongoing drive towards demonetisation, the Reserve Bank of India (RBI) doubled the balance limit that can be kept in prepaid wallets and cards to INR 20,000. The RBI also stated that merchants can transfer up to INR 50,000 per month from these prepaid payment modes to their bank accounts. The relaxation will be applicable until December 30, 2016.