On April 3, the Department of Telecommunications (DoT) issued instructions for an alternative digital KYC (know your customer) process for new mobile connections, saying that the new process would be implemented within a month. Last October the DoT barred telecom companies from executing Aadhaar-based digital authentication, after the Supreme Court restricted the use of Aadhaar information by private companies. That month, telecom operators approached the DoT seeking approval for a new, paperless KYC process as an alternative to Aadhaar-based verification, the Economic Times reported. On November 6 the department asked the operators for a proof of concept for digital KYC. Vodafone Idea and Bharti Airtel began rolling out an alternative digital KYC process around the same time.
DoT’s Aadhaar-free, digital KYC rules
The new KYC process, from the department’s April 3 circular:
- Live photo: Customers seeking a new connection must carry their original identity proof and proof of address. The mobile operator must take a photograph of the customer at the point of sale and attach this to the customer acquisition form (CAF). It must have a white background and no other person in the frame. Using a printed photo is not allowed. The licensee must also take legible photos of the customer’s documents and attach these to the form.
- OTP: Once the CAF has been filled in, the customer will receive a one-time password (OTP) on an alternative mobile number. If the customer doesn’t have one, the number of a relative or friend can be used, provided that it is mentioned in the CAF. The validated OTP will serve as the customer’s signature on the form.
- Submission of customer details: The mobile operator must also include with the customer’s photograph a watermark with the CAF number, the store’s name, code and GPS location, and the date and time.
- Declaration: The mobile operator must also provide a declaration for photographing the customer and her documents, and ‘sign’ this with an OTP. This declaration must include a picture of the agent.
- Authorisation: Next, an authorised representative of the licensee must verify that the photograph and information in the CAF match those in the customer’s ID proof and documents, and that all mandatory field have been filled in. Once this is done the representative will digitally sign the CAF and issue the SIM card.
The circular also states:
- Authenticated app with limited access and registered agents: The entire process must be conducted through the authenticated application held by licensees. Licensees must control access to it and ensure it is not used by unauthorised people. If there are multiple agents at a point of sale, each must be registered with the licensee and given a separate login ID and password.
- Two mobile connections per day with one set of docs: Licensees can issue only two mobile connections to a customer per day with any one of the ID/address proof of address documents. The entire process must be repeated for each new connection.
- Foreign nationals need local reference for OTP: This process will also apply to outstation and foreign customers. For outstation customers, their local reference can be verified with an OTP.