With the intention to help out the Know Your Customer (KYC) process digitally, the Reserve Bank of India (RBI) has now declared that documents filed in the government-backed DigiLocker mobile credentials can now be used to perform the process.
The decision of the RBI will encourage fin-tech startups, banks, and other companies to complete the KYC process of their clients without requesting for a physical copy of their formal papers such as Aadhaar card, Pan Card, etc. The decision can also be viewed as a force to the Indian government’s ambitious Digital India plan.
In a report, RBI said, “Equivalent e-document has been described in Section 3 as an electronic equivalent of a certificate, published by the issuing authority of such paper with its efficient digital signature including certificates issued to the digital locker account of the client as per Rule 9 of the Information Technology Rules, 2016.”
DigiLocker is a flagship enterprise of the Ministry of Electronics & IT (MeitY) supporting the Digital India program. DigiLocker points at ‘Digital Empowerment’ of a civilian by providing access to actual digital documents to citizen’s digital document folders.
The published documents in DigiLocker system are considered to be at par with original physical records as per Rule 9A of the Information Technology Rules, 2016 published on February 8, 2017, vide G.S.R. 711(E).
The RBI has accomplished some changes due to alterations to the PML Rules and one of them is about e-documents. “Equivalent e-document has been described in Section 3 as an automatic equivalent of a document, published by the issuing authority of such report with its original digital signature including certificates issued to the digital locker account of the client as per Rule 9 of the Information Technology Rules, 2016,” states an RBI communique, which has also authorized video-based KYC for banks and fintechs.
Besides, the RBI also let banks and other lending companies regulated by it to practice the Video-based Customer Identification Process (V-CIP) for the KYC method. The efficiency of customer identification will relax with the regulated entities (RE), who will have to guarantee that the video recording is saved in a safe and reliable manner and has the date and time stamp.
