E-KYC is now available for mobile wallets.

Non-banking firms can now use eKYC and mobile wallets can comply with customer verification banking guidelines, the government has allowed nonbanking firms to customer data through the Adhaar Card. The government also gives access to a biometric database if non-banking entities that are bound by Section 11A of the Prevention Of Money Laundering Act, 2002 follow Aadhaar’s privacy and security standards.

Steps to Follow: Government laid down the guidelines to follow to access the

Aadhar Database:-

  • Seek Sanction From Sector Regulator
  • companies must seek permission from RBI.
  • While broking entities require permission from SEBI

Apply UIDAI:-

  • Entities must apply to UIDAI(Unique Identification Authority of India after the permission of the regulator.
  • Privacy And Security Examination:-
  • If the exam is passed, the request for information will then be sent to the finance ministry. After the Supreme Court ruled the companies were forced to move to paper-based customer verification now the court gives permission and companies can easily onboard the customers digitally.
  • But other entities such as mobile wallets are still struggling as Central Bank furthers instructs them to capture full details of their customers to keep the accounts operational.

Benefits:-

  • “This proposal to widen the access of Aadhar Database will lead to greater financial innovation and inclusion” stated the Payments Council Of India.
  • The paperless, cashless and fair digital economy will be promoted.
  • Prevent various scrupulous activities.

Challenges:-

  • Agencies will require new licences, while biometric authentication will still require the physical presence of customers.
  • An Aadhaar based verification via OTP is valid only temporarily, after which full KYC through physical checkup is mandatory.
  • The government can also withdraw the entities which do not fulfil the requirements of performing Adhaar under section 11A.
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