Reinstate subsidies for digital payments, launch video KYC for lenders: Report
    Date :25-Jun-2020

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■ Business Bureau :
THE Government should reinstate subsidies for digital payments for transactions below Rs 2,000 and implement Aadhaarbased e-KYC authentication for financial technology (fintech) firms, NBFCs and mutual funds, according to a PwC IndiaFicci report. The report, titled ‘Redefining the FinTech experience: Impact of COVID-19’, said fintech can act as enablers for the banking and financial sector, playing a crucial role in ubiquity and adoption of digital financial services. It suggested policy and regulation measures to support the fintech sector during the COVID19 crisis.
These include further promoting digital payments and digital banking. “The GoI (Government of India) is advised to reinstate subsidies for digital payments for transactions below Rs 2,000 immediately. Additionally, it is suggested that it should announce status quo ante on merchant discount rate (MDR)," it said. It also suggested that the Reserve Bank of India (RBI) should mandate launching of video KYC processes by all lenders at the earliest and simplify prescriptive requirements such as the presence of a bank officer on the other side during an interaction.
“The RBI should also encourage the development of collaborative solutions for video KYC between banks and fintech,” the report said. Calling for a Central KYC registry, the report suggested an explicit mandate from the RBI regarding it be issued and lenders be instructed to launch Central KYC at the earliest for paperless onboarding of customers. “Banks, NBFCs (after securing an RBI mandate) and KYC registration agencies (KRAs) -- after securing a Sebi mandate -- should be able to upload data to the Central Registry of Securitization Asset Reconstruction and Security Interest (Cersai) CKYC database to enable its growth,” it said.
To enable business continuity of fintech firms, non-banking financial companies (NBFCs), asset management companies, Sebi-registered investment advisors and reporting entities, the report said Aadhaar based e-KYC authentication should be implemented that will help digitally onboard customers without physical intervention.