Fri. Mar 29th, 2024

In a blow to payments banks promoted by telecom companies , the Reserve Bank of India on Tuesday said that KYC done by telecom companies for their user base will not be valid for payments banks under RBI guidelines , the Economic Times stated in a report.

Payments banks promoted by telcos like, Airtel Payments Bank, Jio Payments Bank need to do fresh KYC for all their customers to adhere to the new norms of RBI.

In an internal note that was circulated among payment banks by the banking regulator it said since telcos are not ‘regulated entities’, KYC done by them will not be accepted, and for these banks to open a bank account there will be a need for further KYC of their customers which will be in tandem with the Anti Money Laundering  laws of the land, the ET report said.

Airtel Payments Bank had an edge over non-telecom payment banks, as the earlier norms allowed KYC done for mobile connections to be extended to opening bank accounts. This allowed telecom operators with payments bank licenses to provide bank accounts to all of their existing telco customers with minimum effort and no extra cost.

“Regulated entities shall at their option rely on customer due diligence done by a third party(provided) the third party is regulated, supervised and monitored fof,” the ET report quoted the note sent by the RBI as saying.