Budget 2023: KYC compliance to be made easier; PAN to be common identifier for all digital systems

Financial Minister Nirmala Sitharaman on Wednesday announced that a permanent account number (PAN) will be used as a common identifier for all digital systems of specified for government agencies.

Sitharaman was presenting the Union Budget 2023-24 in parliament on February 1, 2023. Catch LIVE Budget 2023 updates here

The government will also bring national data governance policy, the finance minister said in her Budget 2023 speech.

Ravi Kishore Goyal, VP Strategy – Propelld said, "The finance budget announced today by FM Nirmala Sithraman focused on unleashing the potential in developing sectors such as financial sector. Finance Minister announced the expansion of the government digital certificate depository Digilocker services for the fintech sector. DigiLocker is an Indian digitization online service provided by the Ministry of Electronics and Information Technology under its Digital India initiative. FM Nirmala Sitharaman has announced the expansion of the Government digital certificate depository Digilocker services for the fintech sector."

"Documentation availability will be the focus for the DigitLocker expansion for the fintech sector and we can work with public sector banks to bring in more efficiency to work and reduce fraud and security risks. The fintech sector has been facilitated by digital services, PM Jan Dhan Yojana, Indian Stack and UPI. So we are very happy with this move and we are certain digilockers will be the key to more secure transactions," he added

On this, Abhishek Dev, CEO Epsilon Money Mart said, the simplifying of Know Your Customer (KYC) norms, using PAN as a common business identifier, and enhanced use of Digi locker are all welcome steps towards important objectives of simplification of investment, taxation, and better enhanced financial inclusion of individuals and businesses.

This should further increase the pace of growth of the formal economy and bring more transparency, the expert further said in its note.

Streamlining the KYC regime through the adoption of PAN as a common identifier is a winning proposition across the entire FinTech landscape, S Anand, the Chief Executive Officer and Co-Founder of PaySprint.

He added that individuals will be empowered by this novel ease of always staying KYC-ready by updating documents through DigiLocker & Aadhaar.

Similarly, Adhil Shetty, CEO of BankBazaar.com said, “Know your customer (KYC) simplification with a risk-based approach to support Digital India. This is good. Each financial regulator will now review and release updates to master KYC.”

The national data governance policy for access to anonymous data will enable public goods for big data, Shetty further said and added that the DigiLocker document list will be expanded.