‘KYC compliance needed only for reloading e-wallets’

A security gard stands at the gates at Reserve Bank of India headquarters in Mumbai. (FILE)   | Photo Credit: PAUL NORONHA

The Reserve Bank of India (RBI) has said that customers can use their electronic wallets, which are not compliant with know your customer (KYC) guidelines, for payments to merchants after February 28, even as it clarified that reloading the wallet with more funds would need a fully KYC-compliant account.

In October, RBI had directed all prepaid payments instrument (PPIs) issuers, including mobile-wallet operators, to make all accounts fully KYC-compliant by December 31, 2017. The deadline was later extended to February 28. “Sufficient time has already been given to meet the prescribed guidelines,” RBI deputy governor B.P. Kanungo said while addressing the media.

“In the event of PPI issuers not obtaining KYC related inputs from customers within the timeline, customers will not lose their money. They can continue to undertake transactions for purchase of goods and services as hitherto to the extent of available balance in the PPI,” he said. Mr. Kanungo further said reloading of the PPI and remittances can resume after completing the KYC requirement.

Licences to 55 wallets

RBI has issued licences to 55 non-bank mobile wallets while another 50 banks have their own wallets.

According to RBI, requirement of full KYC for PPIs is a step towards interoperability. “The (PPI) guidelines are designed to strengthen safety and security of transactions and customer protection… a necessary step to pave the way for interoperability between PPIs, bank accounts and cards in a phased manner,” he said.

The regulator is expected to issue guidelines on interoperability shortly. In the first phase, wallets will be made interoperable; in the second, wallets and bank accounts would be interoperable; in the final stage, wallets and cards will become interoperable. “In the first phase, PPI issuers shall make all KYC-compliant PPIs issued in the form of wallets interoperable amongst themselves through Unified Payments Interface (UPI) within six months from the date of issue of this direction,” RBI said in its circular on Oct 11, 2017.

Since many wallet accounts are not fully KYC complaint, banks often do not allow users to transfer funds from their accounts to wallets.

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Printable version | Jun 20, 2021 5:34:56 AM |

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