Amendments to KYC norms will create a inclusive digital payment ecosystem: Fintech Convergence Council
The Fintech Convergence Council (FCC), which functions under the aegis of the Internet and Mobile Association of India (IAMAI), welcomes the recent amendments to the Master Directions on Know Your Customer (KYC) Directions, 2016, by the Reserve Bank of India (RBI).
Srinivas Jain, Co-Chair, FCC, and Executive Director and Head of Strategy, SBI Mutual Fund, said, “The amendments to the KYC norms are aligned with the recent amendments in the Prevention of Money Laundering Act (PMLA) Rules. While some of the changes further clarify provisions, others are enablers, leading to mixed reactions from the industry. The immediate applicability of the amendments has left the industry grappling with the impact and implementation of the changes. However, the changes affirm the regulator’s efforts to strike a fair balance between simplifying the KYC process for regulated entities to a certain extent and enhancing their ability to access financial products through innovative technologies such as AI and ML.”
The amendments bring several changes to the KYC process for REs (Regulated Entities), including the revision of the threshold of ‘Beneficial Ownership’ for registered ‘Company’ and ‘Trust’ to 10% from the earlier 25% and 15%, respectively. The amendments also add or amend the definition of terms such as ‘Group,’ ‘Non-Profit Organisation,’ ‘PEP,’ and ‘Correspondent Banking,’ among others. Furthermore, REs must have a group-wide KYC policy for discharging obligations such as retaining transaction and customer KYC data. Amendments related to Video-based Customer Identification Process (V-CIP) include the requirement to get V-CIP infrastructure tested by CERT-IN empanelled auditors, among other changes.
The Fintech Convergence Council believes that these amendments will create a more robust and inclusive digital payment ecosystem in the country.
About Fintech Convergence Council
FCC was formed in 2018 to represent the positions of various regulated financial service providers and fintech companies regarding different issues. The FCC today represents over 100 members coming from different domains of the industry such as digital lending, wealth management, insurance, digital financial service providers and Regtech. The FCC has been at the forefront of public policy advocacy for the above-mentioned domains including the curation of thought leadership content. The FCC organizes India’s largest annual fintech conference the Global Fintech Fest.
The Digital Lending Committee of the FCC comprises industry members from P2P, MSME, consumer and cards sectors, and has been undertaking advocacy at various levels with policymakers and regulators. The council focuses on resolving various sector-specific challenges before the industry and aims at being a platform for all the stakeholders in the financial services (BFSI) ecosystem with an agenda to deliberate pertinent issues, integrate multiple voices and ensure the development of the fintech sector.
