RBI Might Extend The Deadline For Full KYC To March 2020: NASSCOM

NASSCOM has asked the Reserve Bank of India to extend the deadline for full KYC to March 31, 2020. In an update to which, the industry body said that a deadline extension can be expected. 

In June, NASSCOM wrote a letter  to different government departments/ministries such as the Department of Revenue, UIDAI, NITI Aayog, Ministry of Electronics & Information Technology (MEITY) and the Reserve Bank of India (RBI) with regard to certain challenges that the industry is facing, pertaining to KYC verification process. 

The reason cited by NASSCOM for the request, was that the approval and subsequent operationalising of a digital mode of KYC which would be acceptable to all companies and government authorities will take a couple of months. 

Currently, for a full KYC process, companies need to ensure completion of a physical verification or a biometric check of the users. RBI has given a deadline of Aug 31 for online payment companies to complete their full KYC.  

Further, it had also asked the government to allow regulated entities direct access to the Aadhaar database. To which, the Government has replied that they are reconsidering the process of e-KYC licencing in line with what has been proposed by NASSCOM. 

“We may soon expect NBFCs and non-bank PPls that are regulated by RBI, fulfilling the UIDAl licensing conditions and the prescribed standards of security and privacy, to be allowed to directly approach UIDAI for e-KYC authentication facility,” the industry body noted. 

Among other recommendations, NASSCOM had also suggested that video KYC be approved as a method for doing digital KYC; so that customers who do not want to use Aadhaar for doing KYC have a digital alternative as well.

The NASSCOM’s update noted that video based KYC may be allowed soon. However, RBI is said to be considering usage of alternative electronic channels by leveraging the DigiLocker platform of the ministry of Electronic and IT and other such similar options.

Earlier in February, Amidst the ongoing debate on using Aadhaar for know-your-customer (KYC) processes, Reserve Bank of India has extended the deadline for full KYC compliance by online payment companies till August 31. 

For a full KYC process, the companies will have to ensure completion of a physical verification or a biometric check of the users.

The fintech companies which relied on Aadhaar-based eKYC process for customer onboarding lost their footing after the Supreme Court struck down Section 57 of the Aadhaar Act in 2018. Due to this, private companies lost the authority to access Aadhaar details of the users. Since then the players have been looking for alternatives to comply with the KYC directive.