Ankit Bhatnagar, Head of Product, Mswipe, said the RBI initiative would also help in improving the level of trust among customers as only licensed entities would be allowed to do eKYC.
Bhatnagar said, “Now with eKYC, non-banking entities offering financial services can improve compliance and also ensure that customers do not rely on third-party players through the popular mechanism of on-boarding. have to remain, they can be offered directly through the KUA license.”
Manoj Chopra, Head Innovation & Product Development, Infrasoft Technologies Ltd., was of the opinion that the move will ease customer onboarding for NBFCs, NBFC-Micro Finance Institutions (NBFC-MFIs), payment system operators and payment system participants.
NBFCs rely on paper based authentication mechanisms like offline Aadhaar verification or PAN verification. Chopra said that since such methods involved sharing of photographs of physical documents, it made the process a bit cumbersome and was rejected as the quality of the images shared may not be up to the mark.
“Now, by availing the Aadhaar Authentication License – KYC User Agency (KUA) license or sub-KUA license, these NBFCs can directly leverage an online database in Aadhaar and verify identity including photo,” Chopra said.
Commenting on RBI’s decision, Gurjodhpal Singh, CEO, Tide (India), said that it is a welcome move for the fintech ecosystem.
According to Singh, this will lead to digitization, which will result in a forward-thinking way to ensure faster delivery of financial products in the region and thereby improve the experience for many customers, who were facing several issues. .
“This is one of the most positive steps for the players in the ecosystem, and will help in making the onboarding journey less bumpy for the customers,” Singh said.
Arpit Ratan, co-founder and chief business officer of Sigzi, described the RBI’s decision to empower NBFCs, payment system providers and participants to make the digital journey of customers faster, simpler and safer, a “truly democratic” move.
“Given that RBI has been warning of frauds recently due to improper KYC procedures, granting KUA licenses will certainly deter such activities and increase customer confidence in NBFCs that offer affordable and accessible financial services. Working hard towards providing.” Ratan said.
The Reserve Bank recently cautioned the public against frauds in the name of KYC and advised not to share important information like account details or passwords with unknown persons or agencies.