Thursday, January 16, 2020

RBI Allows Aadhaar Based Video KYC for Onboarding and to Establish Identity.

Soon banks, NBFCs, FinTech, and other financial organizations are likely to remove paper-based and physical onboarding processes of customers. These methods of processing are to be replaced by Aadhaar-based video-KYC (Know Your Customer) according to the new ruling by the Reserve Bank of India (RBI). This is based on the recent amendments made to the guidelines of KYC in India.

Aadhaar-Based Video-KYC – An Overview 

  • The new notification was introduced on the 9th of January 2020 by the RBI.
  • The customers can now be on-boarded through a video call.
  • India is now the first nation in the world to introduce this decision.
  • 6 months earlier a committee for the RBI recommended replacing the present Aadhaar eKYC and KYC norms with a video-based KYC.
  • Their recommendation was to use Face Time for iPhone users and Google Duo for users of Android.
  • For a long time, several financial companies have been asking for a paperless solution that is cost-effective for KYC.
  • This decision will be a boost for the FinTech industries in India.
  • The V-CIP or the Video-Based Customer Identification Process with balances, checks, and specifications has been given in detail by the RBI.
  • This method of processing along with Aadhaar authentication/ Aadhaar KYC (offline verification) will prove to be a solution that is cost-effective for  KYC.

How V-CIP Will Work?

  • Live V-CIP (Video-Based Customer Identification Process) will be done by an official of the financial agency once they receive consent from the customer.
  • Before a V-CIP is undertaken the official has to do a security and software audit to ensure the process is secure enough.
  • Record a live video and capture a photograph.
  • Take information for identification.
  • For Banks: Aadhaar authentication using OTP/ Verification of Aadhaar ekyc offline.
  • For other financial organizations: Offline verification of Aadhaar.
  • Geo-tagging to ensure the physical presence of the customer in the country.
  • Customer’s PAN card to be displayed during the V-CIP and a clear image to be captured and the details to be verified by the official.
  • The official must ensure the details provided by the customer matches the details on Aadhaar ekyc and PAN.
  • The photo on the Aadhaar/PAN has to match with the person undertaking the V-CIP.
  • To be sure that the interactions with the customer have not been pre-recorded the official will ask questions that varied.
  • Offline verification of identity using Aadhaar ekyc with a QR code will be done only if the QR code is less than three days old when the V-CIP is carried out.
  • To ensure the process has been done with integrity the accounts opened following a V-CIP undergoes audit concurrently before being made operational.
  • No third-party provider will be depended upon by the official to undertake the V-CIP. It will be carried out from the domain of the financial service agency or bank.
  • To be sure of the identity of the customer the financial agency/bank should ensure good quality communication. 
  • The video recording must bear the time and date stamp and the official should ensure that it is stored securely.
  • The banks/financial agencies can make use of all the latest technology available to ensure the authenticity of the information provided by the customer. 

This decision by the RBI will prove to be beneficial to banks and other financial agencies to prevent fraudulence. This method of processing allows capturing the exact location of the customer and ensuring that she/he is physically present in the country.

For more information contact us.
We, Finahub, are experts in Aadhaar related products and services like eSign, eKYC, Authentication, etc. If you want to know how your enterprise can start using it, please give us a call  @ 0484 2388285 or email us at [email protected]