Union Budget 2017-18, presented by the Finance Minister, had some of the exclusive areas for a...
RBI on Thursday issued news circular stating the introduction of Video based KYC which shall serve as an alternative to already available e-KYC facility. Aadhar based Video Customer Identification Process (V-CIP) will allow banks and other lending institutions regulated by RBI to remotely complete the KYC process through video.
This amendment in KYC norms came as a relief to Fintechs, NBFCS, banks and other lending institutes that were struck by the Supreme Court’s order of barring private companies and banks to use Aadhar details for providing services. Video-based KYC will save the time and money spent on physically reaching out to people in remote areas for KYC.
This Aadhar based V-CIP will be consent-based which means that banks and other lending institutions will have to take the consent of the customer before conducting video-based KYC.E-KYC-Facility
This introduction of Video-based KYC is a commendable step taken by RBI promoting digital India. RBI has encouraged REs to take the assistance of the latest available technologies like Artificial Intelligence (AI) and face matching technologies to ensure a seamless experience for the customers. REs are also advised to carry out software and security audit and validation of V-CIP before rolling it out for the customers. To strengthen the security of V-CIP, RBI has ruled out that audiovisual interaction will only be possible from the domain of RE and not room a third-party source like Google Duo or WhatsApp Video call, etc.
RBI’s introduction of the Aadhar Based Video Customer Identification Process (V- CIP) is a huge relief to banks and other lending institutions targeting rural customers and a step towards digital India. V-CIP will give a boost to the fintech industry as it allows the fintech industry to enjoy a seamless and cost-effective experience.
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