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Organizational KYC guidelines, to

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The objectives of KYC guidelines is to prevent
banks from being used, intentionally or
unintentionally, by criminal elements for
money laundering activities. Related
procedures also enable banks to better
understand their customers and their financial
dealings. This helps them manage their risks
prudently.
As you are aware, the Reserve Bank of India
has, from time to time, issued a number of
circulars containing policy guidelines on
Issuance and Operation of Pre-paid Payment
Instruments in India. This Master Circular has
been prepared to facilitate the Prepaid
Payment Instrument Issuers, System Providers,
System Participants and all other Prospective
Prepaid Payment Instrument Issuers to have all
the extant instructions on the subject at one
place.
The Master Circular has been updated by
incorporating all the instructions/guidelines
issued on Issuance and Operation of Pre-paid
Payment Instruments in India up to December
03, 2014 and has been placed on the RBI web-
site (http://www.rbi.org.in). A list of circulars
finding reference in this master circular is
enclosed as Appendix.
To provide a framework for the regulation and
supervision of persons operating payment
systems involved in the issuance of Pre-paid
Payment Instruments (PPIs) in the country and
to ensure development of this segment of the
payment and settlement systems in a prudent
and customer friendly manner. For the purpose
of these guidelines, the term persons refers to
entities authorized to issue prepaid payment
instruments and entities proposing to issue
pre-paid payment instruments.
KYC is basically stands Know Your
Customer.
According to RBI every bank or financial
institute should maintain the proper
acknowledgement for the customer.
We can say that The KYC will act as a hammer
on the persons who can easily convert the black
money to white money.
Resident/ Customer visits the Kiosk Channel
for opening account.
e-KYC link is opened on Kiosk platform and
CSP operator requests customer to provide the
Aadhaar number and capture any two
fingerprints for e-KYC verification.
e-KYC Application invokes e-KYC Web Service
of the Bank in the background.
The customer inputs his / her biometrics via the
fingerprint device. This data is encrypted as per
NPCI guidelines and send to UIDAI's Central
Identities Data Repository (CIDR).
UIDAI authenticates the customer data. On
successful verification, UIDAI responds with
encrypted demographic information [Name,
year/date of birth, Gender, Address, Phone and
email (if available)] and photograph. This
information is captured by bank's e-KYC
Application and displays the data on the screen.
CSP operator compares the photo with the
customer and carries out verifications / cross-
checks of personal details with the original
Aadhaar letter.
Now, CSP operator takes a print out and keeps
it along with the account opening form subject
to satisfying other account opening
requirements.
If the Aadhaar Number does not match with
the biometrics, UIDAI server responds with an
error with various reason codes depending on
type of error (as defined by UIDAI). In such
circumstances, CSP operator opens Small
Accounts based on other KYC documents, as
per extant guidelines.
KYC Policy
Banks should frame their KYC policies
incorporating the following four key elements:
Customer Acceptance Policy;
Customer Identification Procedures;
Monitoring of Transactions; and
Risk Management.