The Internet and Mobile Association of India
The association stated that at times of social isolation and ongoing lockdown all critical transactions are being conducted via digital means. Users require digital payment instruments for paying for utilities like electricity and water, all e-commerce transactions for essential items, etc.
The use cases for digital payments have increased manifold under the lockdown process and more and more users are resorting to such instruments to ease their transactional needs.
Similarly, there exists technology and use cases for onboarding of lending, insurance, investments and other customers performing financial services digitally.
The entities are capable of doing minimum KYC for merchant transactions successfully without the face to face physical interaction with the customer only.
While it has become imperative that the industry offers end to end remote digital KYC solution, eliminating the need for any in-person verification, the current Video-KYC regulations are prescriptive which require the officer to be on the other side during the video verification and mandate meeting customers in-person as part of due diligence.
IAMAI reiterated that the financial services and payments sector has for long been asking for completer remote /e-KYC norms as the only requirement for this sector and now the time is right, where this should be enabled by the government.
The industry should be allowed to use Aadhaar based authentication with immediate effect and the need for an in-person verification as part of video KYC be removed entirely and companies are allowed to leverage technology solutions to replace In-person verification said IAMAI.
The association highlighted that physical KYC is not feasible under the present circumstances and the same will continue until the coronavirus in completely under control.
This, in turn, means that many customers are unable to utilize the full range of financial services offered by the entities at times of the present crisis, due to the KYC restriction.
There are numerous users who are either resorting to these services for the first time under a lockdown or are old users but never did full KYC as they did not use the instruments as extensively as they are required to do now. In both cases, an option of doing KYC digitally should be provided to them to access the services normally like before.
The association has appealed to the Government that these provisions need to be revisited in the context of the present crisis.
Digital onboarding to be the new normal for performing KYC, keeping the associated risks under control using technology. This will ease the overall impact of the pandemic during the lockdown and even beyond help the government in containing its spread.