Policy Wrap : Aadhaar now open for eKYC, RBI’s 2021 vision document sees digital payments rise
Fintech companies can now avail of Aadhaar-based eKYC
In a circular dated May 9, the department of revenue, under the Ministry of Finance, laid down the procedure for allowing Aadhaar-based eKYC for non-bank entities. This is significant for companies in the fintech space which were hit by the September 2018 judgement of the Supreme Court barring private entities from seeking the 12-digit identification number of online KYC.
The procedure includes application by an entity seeking permission for Aadhaar-based eKYC to the appropriate regulator, under Section 11A of the Prevention of Money Laundering Act, 2002. The application will be examined by the regulator, followed by the Unique Identification Authority of India (UIDAI). UIDAI will be responsible for granting Authentication User Agency (AUA) or E-KYC User Agency (KUA) to the applicant and forward its recommendations to the central government.
This process will bring more customers on board, which had slowed down post the judgement as fintech companies depended on physical verification of customers.
Industry representative bodies had previously approached the Reserve Bank of India with alternatives to Aadhaar-based eKYC and to re-consider opening it up for private companies after banks and telcos were exempt through an ordinance in February.
RBI’s 2021 vision document to promote debit card usage
In its 17-page vision document for 2019-2021, the Reserve Bank of India (RBI) has envisaged that the number of point of sale terminals (PoS) will rise six-fold over the next three years. The document, titled Payment and Settlement Systems in India: Vision 2019-2021, lays down targeted growth projections in the digital payment landscape and is an indicator of policy announcements to be expected from the federal bank to achieve these goalposts.
Apart from predicting a 35% growth in debit card-based transactions across PoS systems, the vision document also expects digital transactions to grow four-fold. The document also discusses setting up an Acceptance Development Fund (ADF) to subsidise acquirers of PoS for deployment in tier 3 to tier 6 cities.
MeitY asks WhatsApp to share India numbers of those affected by spyware
After it was reported by The Financial Times that WhatsApp was hacked by Israeli spying firm, NSO Group, the Ministry of Electronics and Information Technology has written to the Facebook-owned messenger service requesting it to share India-specific numbers on the users who were compromised. The government department also asked what remedial actions can be taken.
In a report, The Economic Times quoted a senior MeitY official saying that the department had written to the company and will take a call on issuing an advisory to continue using the messenger app. WhatsApp was quoted as saying that the hack had affected a “relatively small number of people globally,” adding that it does not have specific numbers for the “sophisticated attack” as of now.
India is WhatsApp’s largest market at over 200 million monthly active users on last count. The messaging app has been at the centre of the discussion on the spread of fake news and misinformation through social media platforms. The Facebook group of companies in India which includes Facebook, Instagram and WhatsApp were asked by a parliamentary committee to ensure transparency during the general elections.