We need to put our heads together to make KYC system more robust; RBI Governor Sanjay Malhotra

RBI Governor Sanjay Malhotra said on Wednesday that digital Know Your Customer (KYC) processes are supporting the ongoing of customers in the country’s digitisation-related ambitions. Citing one billion records in Central KYC as “a shining example” of progress in that regard, Malhotra said that there is room for improvement from the RBI as well as its regulated entities.

“We all need to put our heads together to make the KYC system more robust and to make it easier for everyone so that there’s no repetition of KYC of the same customer,” said the RBI Governor, speaking at an event in Mumbai.

Central KCY records have several kinds of redundencies, he said.

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The system should restrict a customer who has already undergone KYC verification once from another round of verification, explained the RBI chief.

Mentioning digital KYC and video KYC verifications, the RBI Governor said that the country has come a long way in tapping digitalisation for onboarding customers.

Anti Money Laundering Measures

India gives a lot of importance to anti money laundering (AML) and Countering the Financing of Terrorism (CFT) drives, he said.

The RBI ensures the delivery of a strong AML-CFT system, noted Malhotra.

As technology has enabled more sophisticated ways of money laundering and terror funding, Artificial Intelligence (AI) and block chain will help in tracking suspicious activities.

“By 2027, cross border payments will be faster, cheaper and more transparent along with safety and security… That is the aim,” said the RBI Governor.

Regulations should not create unintended barriers for financial inclusion: Sanjay Malhotra

Stating that regulations should not hinder financial inclusion, the RBI Governor said that policymakers should be mindful and not be "overzealous" with their steps.

He also said that legitimate activities should not be stifled.

The country has made substantial progress on the financial inclusion front with 94 per cent of adults now owing bank accounts, added Malhotra.

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