Government

October 12, 2017

Strict KYC norms introduced to keep ewallets safe: RBI


Reserve Bank of India

An introduction of stricter Know Your Customer (KYC) norms for wallet users has been made by the Reserve Bank of India (RBI), in a set of fresh guidelines along with allowing interoperability and brining in fraud detection norms to prevent fake wallet transactions ­­ steps which will change the scope of operations for mobile wallets.

Customers can now move money between wallets of different companies and banks seamlessly through Unified Payments Interface (UPI) unless they complete full KYC formalities, like they do for bank accounts.

Mobile wallets, which have been consistent to a minimum KYC format (like a simple verification of mobile number) will have to convert to full KYC wallet within a year of opening it. All existing wallet users have to convert to the full KYC format by this year end.

The RBI said minimum KYC wallets cannot have a balance of more than Rs.10,000 and this can be allowed only for purchase of goods and services and not for remittances to other wallets or bank accounts. Full KYC wallets will have a limit of `1 lakh and all facilities for fund transfer will be allowed.

The RBI guidelines show that only serious players with deep pockets will be able to enter the payments space. “The fact that 12 months has been given for conversion of wallets into full KYC ones shows that they have enough time to convince customers to complete KYC requirements,“ said Naveen Surya, chairman of Payments Council of India, the industry body for payments players. “I believe, by then, the KYC for mobile numbers can be completed and Aadhaar rails might improve, making it easier to get KYC formalities done."

RBI has also increased the networth requirements for players in this space. “The higher positive networth requirement for wallets is justified because RBI is recognising wallets as a serious financial services space, "said Vijay Shekhar Sharma, founder of Paytm.

“If money will be moved across wallets of different companies, they will need that higher capital to be able to support such transactions." RBI has also increased the limit on the amount that can be transferred from wallets to Rs.1 lakh. It also allowed inward international remittance for wallets, with an upper limit of Rs.50,000.

Related Post

latest News

  • Tata Steel, ThyssenKrupp sign MoU, become Europe's 2nd-largest steelmaker

    On September 30, Thyssenkrupp and Indian peer Tata Steel struck a preliminary agreement to combine their European steel operations in a 50-50 joint ve...

    Read More
  • Cases from trade creditors before NCLT now on wane

    India’s bankruptcy courts aims to recover from lenders, about Rs. 8 lakh crores in bad debts and direct the flow of credit to more productive sector...

    Read More
  • US Supreme Court rules 8-0 to strike down "provocation rule" created by Appeals Court

    The US Supreme Court on May 30 ruled 8-0 to strike down the "provocation rule" created by the US Court of Appeals for the Ninth Circuit. According to ...

    Read More