Telcos with payments bank licences like Jio, Airtel need to do fresh KYC
This could be a big positive for the non telecom payment banks like Paytm or Fino, who have been doing KYC formalities of their customers from scratch.
In an internal note that was circulated among payment banks by the banking regulator it said since telcos are not ‘regulated entities’, KYC done by them will not be accepted, and for these banks to open a bank account there will be a need for further KYC of their customers which will be in tandem with the Anti Money Laundering (PML) laws of the land.
This could be a big positive for the non telecom payment banks like Paytm or Fino, who have been doing KYC formalities of their customers from scratch and thereby they could get a head start in the business. Industry sources say Paytm has more than 55 million full KYC customers. Telecom companies, which have a payment bank license, include Reliance Jio and Bharti Airtel.
“Regulated entities shall at their option rely on customer due diligence done by a third party… (provided) the third party is regulated, supervised and monitored for…,” read the note sent by the RBI, a copy of which was seen by ET.
In that context it added since telecom companies are not regulated by the RBI and is not subject to norms of the PML Act, KYC done by them cannot be relied upon by the payment banks.
“While it means telcos will also have to get fresh documents as per the AML guidelines from their customers to open bank accounts for them, it also means more formalities for the consumer who is anyway saddled with so many different KYC requirements,” said a senior banker in the know of the matter.