Fintech’s pain to be eased, with new offline KYC Rules

A major step towards easing the customer onboarding process has been taken by the RBI after it has unveiled guidelines for offline KYC. 

The banks have been granted permission by the Reserve Bank to carry out the authentication process of an individual who uses his Aadhar number willingly for identification purposes. This has been stated by the RBI in an amendment which was passed out on Wednesday.

This regulation made in the banking sector have brought in more opportunities for the Fintech sector, through the means of innovative leverage in the way of leveraging the Aadhar database. However there are certain challenges that still remain an issue.

Companies can secure consumer details through the QR code or through XML based process of offline Know Your Customer verification. This process has been prescribed by UIDAI which manages the biometric database for consumers.

However both of these processes are much better than the paper documentation which were in place before Aadhar card came into existence, but entrepreneurs have been giving statements that one time password and biometric authentication was way higher.

Fintech startups have been looking forward modifications regarding the  KYC guidelines to make it ease  the pain to onboard customers. The KYC offline process has been set up which is being seen as a welcome step for paperless KYC based on Aadhar, though this step is a bit for complex than the other methods which were being followed prior to this. This has been said by Sunil Kulkarni, joint managing director, Oxigen Services India, a digital payments company.

Not only the Fintech company but also the payments industry is also wating for the eKYC norms for non bank . As per RBI, for now the directions prohibit eKYC for any non direct benefit transfer.