RBI amends KYC Norms for Regulated Entities; allows Video based Customer Identification Process

In a Notification dated 9th January, 2020 the Reserve Bank of India has amended the Reserve Bank of India (Know Your Customer KYC) Directions, 2016 (“Master Direction”).

The amendments have come into force with immediate effect.

Background:

In order to ease the Customer Identification Process (“CIP”) by Regulated Entities (“Res”), the Reserve Bank will now permit Video based Customer Identification Process (“V-CIP”) as a consent based alternate method of establishing the customer’s identity.

Key takeaways from the amendment are mentioned below:

  1. The Amendment has inserted the following new definitions to the Master Direction.

(i)  “Digital KYC”means the capturing live photo of the customer and officially valid document or the proof of possession of Aadhaar, where offline verification cannot be carried out, along with the latitude and longitude of the location where such live photo is being taken by an authorised officer of the RE as per the provisions contained in the Act.

(ii)  “Equivalent e-document”means an electronic equivalent of a document, issued by the issuing authority of such document with its valid digital signature including documents issued to the digital locker account of the customer as per rule 9 of the Information Technology (Preservation and Retention of Information by Intermediaries Providing Digital Locker Facilities) Rules, 2016.

(iii)  Video based Customer Identification Process (V-CIP)”: a method of customer identification by an official of the RE by undertaking seamless, secure, real-time, consent based audio-visual interaction with the customer to obtain identification information including the documents required for CDD purpose, and to ascertain the veracity of the information furnished by the customer. Such process shall be treated as face-to-face process for the purpose of this Master Direction.

  1. Further, the V-CIP has to be done in the manner as laid down below:

I.  The official of the RE performing the V-CIP will record video as well as capture photograph of the customer present for identification and obtain the identification information mentioned below:

  • Banks: can use either OTP based Aadhaar e-KYC authentication or Offline Verification of Aadhaar for identification. Further, services of Business Correspondents (BCs) may be used by banks for aiding the V-CIP.
  • REs other than banks: can only carry out Offline Verification of Aadhaar for identification.

II.  A clear image of PAN card to be displayed by the customer during the process which will be captured by the RE.

III. In order to ensure the customer’s is physical present in India, the live location of the customer (Geotagging) will also be captured.

IV.  RE has to ensure that the photograph of the customer in the Aadhaar/PAN details matches with the customer undertaking the V-CIP. Further, the identification details in Aadhaar/PAN must match with the details provided by the customer.

V.  All accounts opened through V-CIP shall be made operational only after being subject to concurrent audit, to ensure the integrity of process.

VI.  The RE should ensure that the process is a seamless, real-time, secured, end-to-end encrypted audio-visual interaction with the customer and the quality of the communication is adequate to allow identification of the customer beyond doubt. RE shall carry out the liveliness check in order to guard against spoofing and such other fraudulent manipulations.

VII. The RE should trigger the audio visual interaction. Further, the video recording should be stored in a safe and secure place.

VIII. The official of the RE shall ensure that the sequence and/or type of questions during video interactions are varied in order to establish that the interactions are real-time and not pre-recorded.

IX.  In case of offline verification of Aadhaar using XML file or Aadhaar Secure QR Code, it must be ensured that the XML file or QR code generation date is not older than 3 days from the date of carrying out V-CIP.

Source: Reserve Bank of India

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