According to news reports, an expert committee of Reserve Bank of India, led by former SEBI chairman UK Sinha, was set up to investigate the problems of domestic micro, small and medium enterprises (MSMEs).
The committee has comp up to replace any need for physical presence of customers. The report has suggested a “video KYC (know-your-customer)” process as an alternative to the existing electronic methods of verifying the identity of a person. As per reports, the report has elaborated a nine-step process for performing video KYC, as part of performing a digital KYC wherever possible.
The proposed process would require the following;
A customer of an MSME to sign up on the entity’s mobile app or website.
The customer would then schedule an appointment on a preferred date and time on the application as a part of the sign-up process.
The customer would then share images of his/her original proof of identity or proof of address, such as passport and driving license.
Based on the internal logic of the app/website, the MSME would offer an available date and time closest to the customer’s preference.
An OTP (one-time password) will be generated.
The small enterprise can reach out to the customer as per the date and time agreed upon for initiating the digital verification process. The customer will also be provided with the option of a physical visit in case he/she is not comfortable with the digital process.
After this stage, a video call will be initiated using Google Duo for Android users and Facetime for iOS users.
The customer will be requested to display his/her original identity document, and read out his/her name as it appears on the document.
The MSME representative at the other end will then verify the details with that in the earlier shared image. On successful verification of documents, the MSME representative can then confirm the completion of the video KYC process.
An image of the proof of identity and address, along with the KYC video, will then be uploaded to a proposed platform for digital identification.
On successful verification, the customer will be informed of the verification.
It is also reported that the expert committee has also recommended that the Reserve Bank of India will enable MSMEs to check the credit rating or Credit Monitoring Report (CMR) for their customers, based on consent, through their primary banker.
The report has been formulated after the inputs given by mobile wallet companies to the RBI on video KYC as a possible way to eliminate the physical leg of the current KYC process.
Last year RBI had issued its guidelines on KYC, several wallet firms had tied up with retailers and other companies to ensure in-person KYC of users. However, the process had turned out to be expensive.