This afternoon, the RBI governor Shaktikanta Das made an unscheduled speech to announce the rationalization of KYC compliance norms, which provides for video-based KYC for certain categories. The KYC is a process in which a financial institution does customer due diligence or background verification of an individual or entity to prevent fraudulent activities later on.
Amid the covid-19 pandemic, "the central bank will continue to monitor the situation and will extend all resources and instruments at its command for citizens, business entities, and financial institutions struck by the second wave," said Shaktikanta Das.
The RBI decided to rationalize the component of the extant KYC norms includes,
Extending the scope of video KYC known as V-CIP for new categories of customers such as proprietorship firms, authorized signatories for periodic updation of KYC.
Limiting account opening based on Aadhaar e-KYC authentication in non-face-to-face mode to fully KYC-compliant accounts.
Enabling document verification and submission of online documents, including documents issued through Digilocker for Video KYC or V-CIP.
Include more customer-friendly options such as OTP Aadhar Card verification for periodic updation of KYC.
India is hit by a massive surge of covid-19 cases, recording over 3 Lakhs cases to date. The financial institutions and banks need to implement advanced solutions to verify clients and prevent frauds, said RBI governor, Shaktikanta Das.