RBI allows eKYC to use OTP for account opening

MUMBAI: Reserve Bank of India ( RBI) has amended its know your customer ( KYC) rules to allow banks to open new accounts using one time pins ( OTPs) on mobile phones. This is likely to quicken the process of opening bank accounts.

In a notification on its website RBI said banks can provide OTPs to complete their KYC procedure electronically after taking a consent from customers. These accounts will not be allowed to hold more than Rs 1 lakh in aggregate deposits. Also, the total amount of credits in any single financial year should not exceed Rs 2 lakh, RBI said.

In case of loan accounts, only term loans can be sanctioned using electronic KYC and the aggregate amount of term loans sanctioned shall not exceed Rs 60,000 in a year.

Banks have to however do a due diligence on these customers within a year of opening these accounts failing which these will be closed, RBI said.

“A declaration shall be obtained from the customer to the effect that no other account has been opened nor will be opened using OTP based KYC either with the same regulated entity or with another regulated entity (banks).

Commercial banks will also be required to upload KYC data pertaining to all new individual accounts opened on or after January 1, 2017, with Central KYC Records Registry (CKRR), clearly indicating the accounts opened via eKYC. Other entities like co-operative banks or NBFCs have to upload the KYC data on or after from April 1, 2017.