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RBI changes KYC guidelines for digital wallets to make transactions safer

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RBI has issued new guidelines on KYC documents for digital wallet customers to safeguard their transactions.

Reserve Bank of India has issued new guidelines for KYC (know your customer) verification by the digital wallet companies. The new guidelines are expected to make the digital transactions safer and can play a huge role in establishing digital wallet payments as the go-to payment option for smaller payments across categories.

According to the new guidelines issued by RBI, the digital wallet customers can transfer money to other digital wallet providers or to the bank accounts powered by UPI. However, to do these transactions, the customers will need to provide their complete KYC documents to the company, pretty much how they do at the time of opening a bank account.

RBI has classified KYC in two variants, known as Minimum KYC and Complete KYC. Under Minimum KYC, a customer needs to verify his phone number and under Complete KYC, the companies will need to get the address proof from the customer. Also, if a customer has verified his account with the minimum required details, i.e. phone number, he will not be able to transfer money to other wallet providers or to the bank accounts. In such case, the maximum amount which can be kept in the account is 10,000.

In the case of Complete KYC, a customer can keep up to 1 lakh in his account and can use the money to transfer to other wallets or to a bank account. The digital wallet companies have been asking for keeping the minimum KYC requirement for all sorts of transactions, however, RBI has been adamant on its guidelines keeping the customer security in mind.

The companies have been given time till 31st December 2017 to fall in the RBI guidelines, just like the bank accounts, where the customers have been asked to link their aadhaar numbers in order to authenticate.

About the author

Kunwar Prithvi Singh Chauhan

Part time journalist, full-time observer. Editor-in-Chief at The Indian Wire. I cover updates related to business and startups.

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