Ministry of Communications tightens KYC rules to stop spam and curb fraud

In order to stop spam and curb fraud, the central government has tightened KYC rules. 

In a letter to all UAS/UL (having Access Service Authorization) licensees, Ministry of Communications (Department of Telecommunications) wrote about KYC guidelines.

The letter is in continuation of instructions issued vide letter dated 31.08.2023 wherein, inter-alia, bulk connections were discontinued and business connections have been introduced.

In its latest updates, the ministry has given the following instructions to licensees-

1. In those scenarios where end users are not identifiable in a business connection such as SIMs obtained for R&D and testing activities for a specified purpose, etc., the requirement of end user KYC is optional. However, for this category of customers, mobile connections shall be issued by the licensee's employees only.

2. Before issuing such connections, the licensee shall obtain an undertaking from the subscribing entity detailing the use case scenarios having no end users of the business connections and the licensee shall reasonably satisfy itself that the undertaking from the subscribing entity detailing the use case scenarios is realistic.

3. During physical verification of the entity's address and premises before issuing such connections, the licensee shall verify that the proposed use case scenarios of the subscribing entity are realistic. Further, the licensee shall also monitor the bonafide use of such connections by the subscribing entities. The responsibility of bonafide usage of such business connections lies with the subscribing entity and the same shall be communicated to the subscribing entity in writing explicitly. If it comes into the notice of licensee, licensor, or designated LEAS about misuse of these connections by the subscribing entities, such business connections shall be disconnected immediately without prejudice to any other action that may be taken under the law.

4. The licensees shall provide such connections with limited call/SMS/data facility with definite validity period of maximum one year at a time as per the use case scenarios of subscribing entity. During the renewal of validity for such connections, the licensee shall satisfy itself by usage patterns from the past as well as proposed usage for the upcoming year.

5. Additionally, licensee shall limit the issuance of such connections to a maximum number up to 100 for any given entity at a given time.

6. Such connections shall not be used for M2M communication services.

7. The list of such connections along with the details of restrictions shall be provided separately to LSAs on a monthly basis for audit and also to LEAs as and when sought.

8. Further, it is also clarified that the license conditions related to 'bulk connections', and 'bulk users' in the existing license agreements, shall also be applicable mutatis mutandis for 'business connections' and 'business users'.

9. Resale of SIMs by business connections subscribing entity is not permitted as per the existing licensing framework. Licensees shall ensure that subscribing entity obtains mobile connections for their own use and shall not obtain such connections for third party.

10. All other terms and conditions in para 3 of instructions dated 31.08.2023 shall remain the same.