Must Read:

• RBI introduces Video-based Aadhaar e-KYC for onboarding customers.
• An official will capture the live photo of a customer and identity the same via Aadhaar or PAN along with a series of questions.
• The customer needs to be physically present within the country for geo-tagging.
• The source of the video call must be from the domain of the concerned bank/lender, not from a third-party source. 
• RBI’s master direction did not mention what application can be used for e-KYC Video chat.
• The notification states that the video interaction can only be triggered from the domain of the lender and should be done in a safe and secure manner. 

The Reserve Bank of India on Thursday introduced e-KYC norms, allowing banks and other financial institutes regulated by it to use a Video-based identification process for onboarding the customers. The process of video-based KYC(Know Your Customer) will be verified by Aadhaar to establish a customer’s identity. This step of RBI will save cost and time and will give a big relief to map remote customer identification, unlike physical onboarding. However, this video-based KYC permit will give a boost to digital financial services, especially non-bank lenders (NBFCs) and Fintech firms, who miss a widespread geographical presence.  

“…with a view to leverage the digital channels for Customer Identification Process (CIP) by Regulated Entities (REs), the RBI has decided to permit Video-based Customer Identification Process (VCIP) as a consent-based alternate method of establishing the customer’s identity, for customer onboarding,” the RBI notified on Thursday. 

In a bid to ease the physical data handling process, the Video KYC provision was introduced by UK Sinha, former chairman of the Securities and Exchange Board of India (Sebi) in June last year. 

How the Process Works

• The Video KYC can be done by capturing a live photo of the customer.
• An official will capture the live photo of a customer and identity the same via PAN or Aadhaar along with a series of questions. 
• The agent also needs to make sure that the customer needs to be physically present within the country by capturing his geo-coordinates. 
• The documents can either be uploaded or captured by a video. In the case of a video chat, the customer needs to show the required documents live. 
• The source of the video call must be from the domain of the concerned bank/lender, not from a third-party source. 
• The primary of verification would be Aadhaar but PAN or any other documents, showing business and financial status are also allowed.
• The documents will be uploaded on to the government’s ‘Digi-Locker’ Facility, and can also be accepted by the lenders in the case of new customer on-boarding. 

However, RBI’s master direction did not mention what application can be used for e-KYC Video chat but the notification states that the video interaction can only be triggered from the domain of the lender. Also, customer data has to be stored in a safe and secure manner.