RBI Extends KYC Compliance Deadline For Digital Wallets, Again
In a relief to digital wallet operators, the Reserve Bank of India has once again granted an extension to online payment companies to comply with the Know Your Customer process, three days before its Feb. 28 deadline.
Additional time of six months has been allowed to Prepaid Payment Instruments issuers to comply with the Know Your Customer process, the RBI stated in a press release on Feb. 25, 2019. The decision, it said, was taken based on requests from stakeholders on account of difficulties in undertaking Aadhaar e-KYC and putting in place alternate systems for completing the process.
The KYC compliance for e-wallets, that has now been extended for the third time, is a part of the RBI’s master circular for authorisation, regulation and supervision of PPI issuers.
According to the master circular, if the person or the organisation using the PPI fails to comply with the KYC process, they will not be allowed to load money further in the account though they can continue to purchase goods and services from that operator. Operators have also been directed to give a one-time option to customers to transfer the outstanding balance in the PPI to a bank account without any transaction limit and without levying any charges.
The central bank’s KYC guidelines, according to industry experts, are proving to be costly and time-consuming and are partly responsible for digital wallets losing their market share to the Unified Payments Interface.