RBI declines to extend deadline for mandatory Know Your Customer norms

MUMBAI:  Digital  wallets or prepaid payment instruments (PPIs) were hoping the Reserve Bank of India to relax or extend the deadline for the mandatory Know Your Customer (KYC) norms, but the regulator on Monday categorically said it’s no dice. As per the master directions issued last October, all customers of 55 PPIs and another 50 wallet providers have to be KYC-compliant by February 28. But currently, customers who have submitted their KYC details are a minority, which is why service providers were hoping the central bank will go soft.

“Sufficient time has already been given to meet the prescribed guidelines. In the event PPI issues not obtaining the KYC-related inputs within the timeline from their customers, customers will not lose their money,” said B P Kanungo, deputy governor of RBI. Speaking to reporters here on Monday, he said the guidelines were designed to strengthen safety and security of transactions and customer protection.

Allaying fears, Kanungo clarified that customers can continue purchase of goods and services as per the available balance, but will have to fulfill the KYC requirements before remitting money or reloading the wallet. Originally, service providers who handled about `12,000 crore worth transactions in December, were given time till December 2017, which was later extended to February 28. RBI introduced tighter KYC norms for digital wallets or prepaid payments instruments last October, making the revised guidelines mandatory for even wallets, where users cannot load more than `10,000 a month.

Those failing to comply within a year would face severe operational restrictions, RBI had warned. As per reports, PPIs were feeling that the KYC-requirement was challenging and if the guidelines were to be implemented, they feared losing business as 90 per cent customers have been on boarded using the minimum KYC, which is giving the telephone number.