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KYC norms for prepaid wallets: Consumers can use existing balance post February 28, says RBI

As per the laws, a customer can fulfil the KYC requirements by submitting any document like the Aadhaar number, voter ID, among others.

By: ENS Economic Bureau | Mumbai |
Updated: February 27, 2018 2:55:51 am
mobile wallets, rbi, prepaid payment methods, mobile wallets india, unified payments interface, indian economy, technology news Customers can continue to undertake transactions for purchase of goods and services as per the available balance, but will have to fulfill the KYC norms before remitting money or reloading the wallet.

The Reserve Bank of India on Monday said mandatory compliance of know-your-customer (KYC) guidelines will be applicable for prepaid wallet customers with effect from March 1, 2018.

However, customers can continue to undertake transactions for purchase of goods and services as per the available balance, but will have to fulfill the KYC norms before remitting money or reloading the wallet. As per the laws, a customer can fulfil the KYC requirements by submitting any document like the Aadhaar number, voter ID, among others.

“The guidelines are designed to strengthen safety and security of transactions and customer protection,” RBI Deputy Governor BP Kanungo said. Customers who have balances in such wallets or prepaid payment instruments (PPIs) need not worry about their money even if they do not follow the KYC norms, the central bank said. “Sufficient time has already been given to meet the prescribed guidelines. In the event PPI issuers not obtaining the KYC-related inputs within the timeline from their customers, customers will not lose their money,” Kanungo said.

“The RBI had provided detailed guidelines governing issuance of prepaid payment instruments through its master circular on October 11, 2017. The guidelines were designed to strengthen safety and security of transactions and customer protection, and provided for timeline of December 2017 for PPI issuers to comply with KYC requirement which is a necessary step to pay for interoperability between PPIs, bank accounts and cards in a phased manner,” it said. This was extended to February 28, 2018.

In its October guidelines, the RBI said that interoperability will be enabled in phases for the PPIs and that in the first phase, the issuers (both bank and non-bank entities) should make all KYC-compliant PPIs issued in the form of wallets interoperable amongst themselves through Unified Payments Interface (UPI) within six months from the date of issue of the guidelines. Subsequently, interoperability should be enabled between wallets and bank accounts through UPI and for PPIs issued in the form of cards later on. However, banks may continue to issue PPIs in association with authorised card networks.

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