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RBI updates operating guidelines for Payments Banks regarding KYC

The RBI has issued an update to the Operating Guidelines for Payments Banks with regard to KYC requirements while onboarding customers of telecom companies, in the wake of the Airtel Payments Bank rerouting of subsidies by creating Payments Bank accounts for subscribers validating mobile phone numbers. The circular draws attention to Section 14 of the Master Direction on KYC from February 25, 2016: For the purpose of verifying the identity of customers at the time of commencement of an account-based relationship, REs, shall at their option, rely on customer due diligence done by a third party, subject to the following conditions: Necessary information of such customers’ due diligence carried out by the third party is immediately obtained by REs. Adequate steps are taken by REs to satisfy themselves that copies of identification data and other relevant documentation relating to the customer due diligence requirements shall be made available from the third party upon request without delay. The third party is regulated, supervised or monitored for, and has measures in place for, compliance with customer due diligence and record-keeping requirements in line with the requirements and obligations under the PML Act. The third party shall not be based in a country or jurisdiction assessed as high risk. The ultimate responsibility for customer due diligence and undertaking enhanced due diligence measures, as applicable, will be with the RE. Previously the Operating guidelines for Payments Banks. allowed Payments Banks to utilise same KYC details if they are "of the same quality as prescribed…

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Vidyut is a commentator on socio-political issues with a keen interest in behavioral sciences, digital rights and security and manages to engage her various proficiencies to bring an unusual perspective to issues related with the intersection of tech and people.

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