In this post, we decode what Governor Das has announced with regard to the changes in the existing KYC norms.

1) Extending the scope of Video KYC known as V-CIP (Video-based Customer Identification Process) for new categories of customers such as proprietorship firms, authorized signatories and beneficial owners of legal entities and for periodic updation of KYC

The extension of the scope of Video KYC is a good sign for both businesses and banks. The key implications are:

• Increase in the market size and acceleration of the adoption of VCIP by adding entity onboarding to the use-case
• Reduction in turnaround time (TAT) of entity onboarding for both – asset and liability sides
• Extension of the scope for neobanks and digital banks to serve proprietors, SMEs and MSMEs
• Significant reduction in operational costs attached to entity onboarding

2) Conversion of the limited KYC accounts, opened on the basis of Aadhaar e-KYC authentication in non-face-to-face mode

• This is a major reform for the banking industry since limitations shall be lifted off a sizeable number of existing minimum KYC accounts that were previously opened through Aadhaar eKYC (OTP-based)

3) Enabling the use of KYC Identifier of Centralised KYC Registry (CKYCR) for V-CIP and submission of electronic documents (including identity documents issued through DigiLocker) as identity proof

This measure comes as a relief given that it makes some processes easier.

• Eases the process of sharing and authenticating identity proof by using CKYC ID or Digilocker
• Gives a boost to the adoption of CKYC and Digilocker, in line with RBIs previous initiatives

4) Introduction of more customer-friendly options, including the use of digital channels for the purpose of periodic updation of KYC details of customers.

• Promotes the adoption and usage of digital banking solutions and neo banks
• Re-KYC, which was a major operational challenge for banks, can now be facilitated seamlessly using Video KYC

These updates to the existing KYC norms are a step towards recognizing the efficiency and benefits of digitization of KYC processes. We at Perfios have built the best-in-class Video KYC solution that will help you leverage these newly introduced modifications to improve customer service and streamline operations in a compliant manner. Get in touch with us if you are looking for a robust and compliant Video KYC solution!