The Reserve Bank of India (RBI) has agreed to permit video-based Know Your Customer (KYC) as a way to verify a customer’s identity. All financial entities regulated by RBI such as banks, non-banking financial companies, and wallet service providers consider this move as a huge relief.
The video-based customer identification process (V-CIP) will be implemented as an alternate method to leverage the digital channels for customer authentication by regulated entities. This is considered advantageous also because remote customer authentication is budget-friendly as compared to physically onboarding customers.
The move allows an officer of a financial institution to vet a customer’s identity through PAN or Aadhaar card, remotely. Another requirement here is that an agent must be appointed to ensure that the customer is physically present in the country. This will be done by capturing the geo-coordinates.
In addition, the customer must make the video call through the domain of the concerned bank and not via a third-party application such as Google Duo or WhatsApp. It becomes a necessity for the banks to integrate their applications and website with a link to initiate the video KYC process. The V-CIP will be operated by officials specifically trained for such verification.
The circular specifies that the reporting entities have to capture a clear image of the PAN card held by the customer. This requirement is mandatory unless the customer provides e-PAN.
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