Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TDS :: empanelment :: VAT RATES :: cpt :: form 3cd :: articles on VAT and GST in India :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: ACCOUNTING STANDARDS
 
 
Latest Circulars »
 RBI-Exim Bank's GoI supported Line of Credit of USD 35.00 million to the Government of the Republic of Guinea
 RBI-Amendment to Master Direction on Know Your Customer
 Reserve Bank of India Act, 1934 – Section 42(1A) Withdrawal of the Incremental CRR
 RBI-Transcript of Statement made by Shri R. Gandhi, Deputy Governor
 Requirement of customer due diligence and need for maintenance of records
 Card Not Present transactions – Relaxation in Additional Factor of Authentication for payments upto ₹ 2000/- for card network provided authentication solutions
 Auction of Government of India Dated Securities December 05, 2016
 Withdrawal of Legal Tender Character of the old Bank Notes in the denominations of ₹ 500/- and ₹ 1000/- (Updated as on December 05, 2016)
 RBI-Investment under PIS in M/s Laurus Labs Limited by FIIs/FPIs upto 49 per cent and NRIs upto 24 per cent
 RBI-Issuance of 35 days Cash Management Bills under Market Stabilisation Scheme (MSS)
 RBI-Information from Unauthenticated Sources – Advisory to banks

RBI-Know Your Customer (KYC) Norms / Anti-Money Laundering (AML) Standards /Combating of Financing of Terrorism (CFT) / Obligation of NBFCs under Prevention of Money Laundering Act (PMLA), 2002 Recognising E-Aadhaar as an 'Officially Valid Document' under PML Rules
July, 15th 2014

RBI/2014-15/122
DNBS(PD).CC.No 400/03.10.42/2014-15

July 14, 2014

All Non-Banking Financial Companies

Dear Sirs,

Know Your Customer (KYC) Norms / Anti-Money Laundering (AML) Standards /Combating of Financing of Terrorism (CFT) / Obligation of NBFCs under Prevention of Money Laundering Act (PMLA), 2002 Recognising E-Aadhaar as an 'Officially Valid Document' under PML Rules

Please refer to paragraph I (11) of Master Circular DNBS (PD) CC No. 387/03.10.42/ 2014-15 dated July 1, 2014 on Know Your Customer (KYC) Norms / Anti-Money Laundering (AML) Standards/Combating of Financing of Terrorism (CFT) / Obligation of banks under Prevention of Money Laundering Act (PMLA), 2002 which states that letter issued by Unique Identification Authority of India (UIDAI) containing details of name, address and Aadhaar number, may be accepted as an ‘Officially Valid Document’. Further, while opening accounts based on Aadhaar, NBFCs must satisfy themselves about the current address of the customer by obtaining required proof of the same as per extant instructions.

2. In order to reduce the risk of identity fraud, document forgery and have paperless KYC verification, UIDAI has launched its e-KYC service. Accordingly, it has been decided to accept e-KYC service as a valid process for KYC verification under Prevention of Money Laundering (Maintenance of Records) Rules, 2005. Further, the information containing demographic details and photographs made available from UIDAI as a result of e-KYC process ("which is in an electronic form and accessible so as to be usable for a subsequent reference") may be treated as an 'Officially Valid Document' under PML Rules. In this connection, it is advised that while using e-KYC service of UIDAI, the individual user has to authorize the UIDAI, by explicit consent, to release her or his identity / address through biometric authentication to the NBFC branches. The UIDAI then transfers the data of the individual comprising name, age, gender, and photograph of the individual, electronically to the NBFCs, which may be accepted as valid process for KYC verification. The broad operational instructions to NBFCs willing to use the UIDAI e-KYC service on Aadhaar e-KYC service are enclosed as Annex. Such NBFCs are advised to have proper infrastructure (as specified in Annex) in place to enable biometric authentication for e-KYC. Physical Aadhaar card / letter issued by UIDAI containing details of name, address and Aadhaar number received through post would continue to be accepted as an 'Officially Valid Document'.

3. Further NBFCs may accept e-Aadhaar downloaded from UIDAI website as an officially valid document subject to the following:

a) If the prospective customer knows only his / her Aadhaar number, the NBFC may print the prospective customer's e-Aadhaar letter in the NBFC directly from the UIDAI portal; or adopt e-KYC procedure as mentioned in paragraph 2 above.

b) If the prospective customer carries a copy of the e-Aadhaar downloaded elsewhere, the NBFC may print the prospective customer's e-Aadhaar letter in the NBFC directly from the UIDAI portal; or adopt e-KYC procedure as mentioned in paragraph 2 above; or confirm identity and address of the resident through simple authentication service of UIDAI.

4. Physical Aadhaar card / letter issued by UIDAI containing details of name, address and Aadhaar number received through post and e-KYC process mentioned in the circular referred in paragraph 2 above would continue to be accepted as an 'Officially Valid Document'.

5.NBFCs may revise their KYC policy in the light of the above instructions and ensure strict adherence to the same.

Yours faithfully,

(Sindhu Pancholy)
Deputy General Manager 
Encl: as above


Annex

Operational Procedure to be followed by NBFCs for e-KYC exercise

 

The e-KYC service of the UIDAI is be leveraged by NBFCs through a secured network. Any NBFC willing to use the UIDAI e-KYC service is required to sign an agreement with the UIDAI. The process flow to be followed is as follows :

1.

Sign KYC User Agency (KUA) agreement with UIDAI to enable the NBFC to specifically access e-KYC service.

2.

NBFCs to deploy hardware and software for deployment of e-KYC service across various delivery channels. These should be Standardisation Testing and Quality Certification (STQC) Institute, Department of Electronics & Information Technology, Government of India certified biometric scanners at NBFC branches as per UIDAI standards. The current list of certified biometric scanners is given in the link below :
http://www.stqc.gov.in/sites/upload_files/stqc/files/UID_Auth_Certlist_250613.pdf

3.

Develop a software application to enable use of e-KYC across various NBFC branches, as per UIDAI defined Application Programming Interface (API) protocols. For this purpose NBFCs will have to develop their own software under the broad guidelines of UIDAI. Therefore, the software may differ from NBFC to NBFC.

4.

Define a procedure for obtaining customer authorization to UIDAI for sharing e-KYC data with the NBFC. This authorization can be in physical (by way of a written explicit consent authorising UIDAI to share his / her Aadhaar data with the NBFC for the purpose of opening deposit account) / electronic form as defined by UIDAI from time to time.

5.

Sample process flow would be as follows :

 

a.

Customer walks into branch of NBFC with his / her 12-digit Aadhaar number and explicit consent and requests to open a deposit account with Aadhaar based e-KYC.

 

b.

NBFC representative manning the branch enters the number into NBFC's e-KYC application software.

 

c.

The customer inputs his / her biometrics via a UIDAI compliant biometric reader (e.g. fingerprints on a biometric reader).

 

d.

The software application captures the Aadhaar number along with biometric data, encrypts this data and sends it to UIDAI's Central Identities Data Repository (CIDR).

 

e.

The Aadhaar KYC service authenticates customer data. If the Aadhaar number does not match with the biometrics, UIDAI server responds with an error with various reason codes depending on type of error (as defined by UIDAI).

 

f.

If the Aadhaar number matches with the biometrics, UIDAI responds with digitally signed and encrypted demographic information [Name, year / date of birth, Gender, Address, Phone and email (if available)] and photograph. This information is captured by NBFCs e-KYC application and processed as needed.

 

g.

NBFCs servers auto populate the demographic data and photograph in relevant fields. It also records the full audit trail of e-KYC viz. source of information, digital signatures, reference number, original request generation number, machine ID for device used to generate the request, date and time stamp with full trail of message routing, UIDAI encryption date and time stamp, NBFCs decryption date and time stamp, etc.

 

h.

The photograph and demographics of the customer can be seen on the screen of computer at NBFC branches for reference.

 

i.

The customer can open deposit account subject to satisfying other account opening requirements.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions