RBI guide­lines on full-KYC ‘can kill wal­lets’

Play­ers to meet se­nior of­fi­cials of the cen­tral bank to voice their con­cern

The Hindu Business Line - - BANKING - PRIYANKA PANI

Pre­paid Pay­ment In­stru­ment (PPI) play­ers in the coun­try such as Paytm, ItzCash, Mo­bik­wik and Cit­rus will soon meet se­nior Re­serve Bank of In­dia of­fi­cials to dis­cuss cer­tain con­cerns over the re­cently an­nounced guide­lines.

Ac­cord­ing to sources, wal­let play­ers are of the view that the guide­lines on the stricter and manda­tory Know Your Cus­tomer (KYC) norms for users of mo­bile wal­lets will be a de­ter­rent to the grow­ing wal­let in­dus­try and that it might also “kill” smaller trans­ac­tions.

The RBI, in its guide­lines, said the cus­tomers want­ing to move money be­tween dif­fer­ent wal­lets and banks through Uni­fied Pay­ments In­ter­face (UPI) will have to pro­vide full KYC within the next 12 months fail­ing which they will not be able to trans­fer money to wal­lets or to banks. All ex­ist­ing wal­let users have been asked to con­vert to the full KYC for­mat by this year-end.

“They (RBI) are ask­ing full KYC for trans­ac­tions as low as ₹10,000. This will kill the in­dus­try and maybe take us back to the tra­di­tional mode of money trans­fers i.e. through banks,” said a source, who is a part of an in­dus­try body for wal­lets. Ear­lier, wal­lets used to have a min­i­mum KYC for­mat (by ver­i­fy­ing the mo­bile num­ber). He said the full KYC process is te­dious, com­pli­cated and ex­pen­sive for the wal­let play­ers and also cum­ber­some for many peo­ple, who have a nor­mal bank ac­count and use wal­lets for money trans­fers (re­mit­tances).

“They an­nounced it dur­ing Di­wali, a time when re­mit­tances are the high­est. A large per­cent­age of the wal­let users for re­mit­tances is peo­ple with blue-col­lared jobs, taxi driv­ers and daily wage labour­ers, among oth­ers. It will be dif­fi­cult for them. “So, we (all stake­hold­ers) are meet­ing the RBI of­fi­cials to dis­cuss this and re-think the guide­lines,” he said, adding that 60 per cent of the trans­ac­tions that oc­cur on wal­lets are re­mit­tances. How­ever, a user can buy goods worth ₹10,000 and above with­out KYC.

An­other wal­let player, who did not wish to be named, said, “At a time when there are is­sues re­gard­ing pri­vacy and se­cu­rity breach in dig­i­tal trans­ac­tions, a full KYC would mean that the wal­lets have all the per­sonal data of a user.” The gov­ern­ment does not ask for any KYC de­tails to pur­chase gold worth ₹2 lakh and be­low in cash.

The meet­ing will also dis­cuss the norms on mak­ing UPI com­pul­sory for wal­let play­ers. Be­sides, it will dis­cuss the guide­lines re­strict­ing bal­ance in KYC wal­lets (non-bank­ing) to ₹10,000.

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