Criminals and money launderers use fraudulent identities during the onboarding process to mask their true identities. KYC in banking requires banks to "get to know" their customers by using by confirming to a high level of assurance that those customers are who they say they are.
Nowadays, KYC is done online; that's why banks are looking for effective solutions and technologies that can effectively verify customers remotely.
The central bank has said that digital KYC, i.e., capturing a live photo of the customer along with valid identity documents such as Aadhaar card, PAN card, or other government-approved identity cards and the latitude and longitude of the location where such live photo is being taken by an authorized person of the Reporting Entity (RE).
The reporting entities (REs) would record the entire session and capture photographs of the customer present for identification. The information collected will be like this:
• Reporting entities, apart from banks, for the goal of identification, can only carry out offline Verification of Aadhaar.
• Banks are allowed to use either offline Verification of Aadhaar or OTP based Aadhaar e-KYC authentication for the purpose of identification. During the video KYC process, the customer should display a clear image of the PAN card to the reporting entity (RE); if e-PAN is provided by the customer, then it will work. In addition to that, the assigned officer should make sure that the photograph of the customer in the Aadhaar/PAN details matches the customer undertaking the video KYC.
How can Video KYC help Regulated Entities?
With video KYC, there is no need for the customers to go into a branch, wait there, and provide paper copies of proofs and wait for several days to complete the account-opening process. Video KYC reduces the cost of onboarding and changes the way bank accounts are opened in the future. Video KYC process is beneficial for both financial institutions and customers as it saves time and money. It costs between 150–200 rupees for face to face onboarding. Video KYC reduces this sum to a fraction and makes the whole process quick and hassle-free.
The forms of ID that are supported within Video KYC
Customers can provide their Aadhaar card and PAN card as identity proofs. Banks can use either Offline Verification of Aadhaar or OTP based Aadhaar e-KYC authentication. All other financial institutions are only allowed to do Aadhaar Offline verification. To ensure that the Aadhaar offline files are not more than three days old, the customer is asked to download the files during the live video call. It is done to ensure that the rightful owner of the Aadhaar is downloading the offline file. Also, the customer can't record and upload Videos; only regulated entities can record the video. It is the duty of the regulated entity to make sure the process is seamless, real-time, secured, and end-to-end encrypted.
Final Words
Video KYC is an easy way to complete the KYC process. KYC payment is made when you verify your identity.
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