• Finance ministry has amended the Prevention Of Money Laundering Bill to introduce these changes
• Earlier, companies were mandated to do a physical or in-person KYC to sign up new customers
• Digital payments companies stood to lose 95% of their users, due to physical KYC requirements

India’s finance ministry has amended the country’s Prevention Of Money Laundering Bill (PMLA), to introduce a new process of carrying out digital KYC (know your customer). With this amendment, the ministry has asked fintech companies to develop applications for digital KYC which shall be available at customer touchpoints such as retail or banking outlets, physical stores and other customer service centres.

The KYC application will be accessible through a login ID and password or a live OTP (one time password) for authorised personnel. Further, a live photograph of the customer will be taken at these touchpoints, and the customer has to present an original copy of their identity and address proof documents. Similarly, a live photo of the original Aadhaar card will be taken at these touchpoints.

The amendment stresses on the fact that no printed or video-graphed picture of the customer or documents will be allowed. 

Further, for e-signatures, the ministry said that an SMS containing the text ‘Please verify the details filled in form before sharing OTP’ will be sent to registered mobile number. And post validation of the OTP, it will be treated as a client signature on the customer application form.