 "<b>Your Money:</b> Revised e-KYC can expedite opening of accounts")
The Know Your Customer (KYC) procedure in case of a bank deposit or a loan can be quite cumbersome. It involves submitting copies of documents for proof of identity and residence such as PAN card, utility bill, passport, etc. Even if the bank arranges for the documents to picked up from the customer’s doorstep or allows uploading scanned copies of the documents, the customer has to make one trip to the bank branch to sign the application and complete the process. But, the Reserve Bank of India (RBI)’s revised guideline on e-KYC now allows financial institutions to complete the KYC process using a one-time password (OTP). But, there are restrictions.
According to the RBI guideline, banks and other financial institutions can now provide an option for an OTP-based e-KYC process for onboarding of customers, for both deposit and loan accounts. But there must be a specific consent from the customer for authentication through OTP. The aggregate balance of all the deposit accounts of the customer shall not exceed Rs 1 lakh and the aggregate of all credits in a financial year, in all the deposits taken together, shall not exceed Rs 2 lakh. In case of loan accounts, the amount should not exceed more than Rs 60,000 per year. Once the account is opened using OTP based e-KYC, it should be regularised within one year, failing which it will be closed immediately. In respect of loan accounts, no further debits shall be allowed. One customer is allowed to open only one account using OTP based e-KYC with either the same bank or other banks. This OTP-based e-KYC information will be uploaded to the Central KYC Records Registry by the financial institutions. The new procedure will work only if the customer has an Aadhaar number.
“The OTP-based e-KYC is only one part of the KYC process. It is in addition to the standard paper-based KYC procedures already in place. Since any account opened using this procedure has to be regularised to a standard account by completing the Customer Due Diligence (CDD) procedure within one year, it can be seen as an intermediate step aimed at expediting the process of opening a loan or savings account,’’ says Parag Mathur, general counsel and head of compliance, BankBazaar.com.
For example, if you open a savings account with a balance of Rs 25,000. Later, you deposit another Rs 75,000. Now, you have reached the maximum limit and cannot make any further deposits unless you withdraw some of the funds. Suppose you withdraw Rs 50,000, you can now deposit another Rs 50,000. There is no cap on the number of deposits but only on the value that can be held in the account. Even if you now withdraw Rs 75,000, you can deposit only another Rs 50,000 at most, as you have Rs 1.5 lakh already credited to your account. Your limit is now exhausted, explains Mathur.
“These limits are applicable only until the account is regularised by completing the CDD procedure. The limits on the transaction are not applicable post that,’’ he points out.
Only after a customer regularises his first OTP-based e-KYC account, can he open another one, he adds. Currently, banks offer online loans where customers can upload copies of their documents and get disbursal immediately, offer it only to their existing customers whose KYC is already complete. “The new procedure will help reduce costs as there is no need to employ agents or intermediaries to collect documents to complete the KYC process,’’ says an official from a private bank.
Since the maximum loan allowed under the OTP-based e-KYC is only Rs 60,000, it is likely to benefit personal loan customers. “The restriction on amounts make this currently applicable for small accounts, consumer durable financing and payments bank accounts,” says Rohit Lohia, COO, co-founder, CoinTribe. Going ahead, it is possible that limits may be relaxed if the loan is to be disbursed into an account where KYC is already done, he adds.