KYC rules SIMPLIFIED by RBI - Video-based customer identification process becomes easier; Know How

Amid the Coronavirus Pandemic banking regulator Reserve Bank of India has taken this important decision to simplify the ‘Know Your Customer’ requirements. This has been done for the users of banking services who want to update their KYC details. The process will be helpful in periodic updation also. On Monday, RBI amended its master direction on ‘Know Your Customer’ to further leverage the video-based customer identification process (V-CIP). 

V-CIP is an alternate method of customer identification. Under this the customers KYC details are updated using facial recognition by an authorised official of the regulated entity. This process ensures seamless, secure, live, informed-consent based audio-visual interaction with the customer to obtain identification information. 

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What all can be done under V-CIP: 

• The Central Bank has said that regulated entities may undertake V-CIP to carry out Customer Due Diligence (CDD) in case of new customer on-boarding for individual customers, proprietor in case of proprietorship firm, authorised signatories and Beneficial Owners (BOs) in case of Legal Entity (LE) customers. 
• The regulated entities or REs may also undertake V-CIP for conversion of existing accounts opened in non-face to face mode using Aadhaar OTP based e-KYC authentication, and updation or periodic updation of KYC for eligible customers. 
• The banking watchdog has also specified certain minimum standards which regulated entities will have to follow while undertaking KYV under V-CIP process. 
• The RBI regulated entities (REs) include banks NBFCs and payment system operators among others. 

The amended provisions also call for compliance of the RBI guidelines by REs on minimum baseline cyber security and resilience framework.

The RBI has also mandated REs to formulate a clear workflow and standard operating procedure (SOP) for V-CIP and ensure adherence to it, a PTI report said. The V-CIP process should be operated only by officials of the RE specially trained for this purpose, it further said.

The authorised official should record audio-video as well as capture photograph of the customer present for identification, the report said.  

The official can obtain the identification information using OTP based Aadhaar e-KYC authentication, offline verification of Aadhaar for identification, KYC records downloaded from CKYCR or equivalent e-document of Officially Valid Documents (OVDs) including documents issued through DigiLocker, the report said. 

Further, the RE will have ensure to redact or blackout the Aadhaar number.