KYC

Rs. 1.75 Crore Penalties for KYC Violations

3 MIN READ
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The RBI is getting tough for any violations on those fronts. PNB, UCO Bank, Corporation Bank, and Allahabad Bank just the latest to be slapped with fines by the RBI to the tune of Rs 1.75 Crores. These are for non-compliance with KYC requirements and the opening of current accounts.

The writing is on the wall for banks and financial institutions. They can neglect to Know Your Customer (KYC) and Anti Money Laundering (AML) norms at their own peril.The RBI is getting tough for any violations on those fronts. PNB, UCO Bank, Corporation Bank, and Allahabad Bank just the latest to be slapped with fines by the RBI to the tune of Rs 1.75 Crores. These are for non-compliance with KYC requirements and the opening of current accounts.Last month, the RBI had imposed a fine of Rs 1 Crore on HDFC Bank for KYC norm violations.Earlier in the year, Citibank, Bajaj Finance, and Bank of Maharashtra were fined in excess of Rs 1 Crore each for non-compliance with KYC and AML norms.The ‘Devil and the Deep Sea’ PredicamentFor fintechs and NBFCs, the situation is dire. On one side is the RBI’s whip. On the other side are tough KYC norms that require feet on the street, call center for follow-ups, and back-end staff for accuracy checks. Not to forget an extremely competitive market that puts extreme pressure on costs and overheads.Technology-driven KYC to the rescue

  1. Video KYC has the potential to transform KYC processes. We see great excitement in the industry about Video KYC. Many large banks and financial institutions are already piloting Video KYC with us. A nod from the regulator will make this the most sought after KYC technique.

Video KYC is the most effective, efficient, and safe way to onboard remote customers. One can capture digital documents, verify them, authenticate the customer, and confirm their physical presence during the transaction over a 10 second video call. Further, this can be done without the need of a back-end staff or agents.

2. Digital KYC allows accepting documents in digital formats, extracts relevant data, checks the images for forgery, verifies credentials of the ID card, and does face comparison to ensure that the ID card belongs to the customer. All in 5 seconds.

Digital KYC provides the same time and cost efficiencies as Aadhaar eKYC. The industry is rapidly adopting these solutions to stay compliant while keeping overheads low.


IDfy provide Digital KYC solutions including Video KYC and Image-based KYC for fintechs, NBFC, Banks, Telcos, and Sharing Economy companies.

For more information or to schedule a demo, please write to shivani@idfy.com