RBI Initiates Video Based KYC as an Alternative to already present E-KYC Facility

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

RBI has advised Regulating Entities (REs) to adhere to the following rules:

1. After obtaining consent from the customer for V-CIP, the official of RE shall record the video as well as take the photograph of the customer present for identification.
2. Banks can use either OTP based Aadhar e-KYC authentication or offline Aadhar verification for the identification of the customer. However, Regulating Entities other than Banks can only use offline Aadhar based verification for identification.
3. For PAN verification, REs shall capture a clear image of the PAN card. Customers who have provided e-PAN will not be involved in this step. Next, the details of the PAN card shall be verified from the database of issuing authority.
4. To ensure that the customer is physically present in India features of geotagging will also be there in the video call.
5. The officials of REs shall ensure that the photograph of the customer in Aadhar and PAN card matches the person undertaking the Video-KYC. All the other details of PAN and Aadhar card should be thoroughly checked.
6. Regulating Entities should ensure the security of the video recording and make sure it bears date, time and stamp.

A Step towards Digital India

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.

Take Away

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.

Also Read: Reasons for implementing the Digital Banking