Know how you can open an account without visiting a bank

In January 2020, RBI allowed banks to use video-based Know Your Customer authentication as a customer identification process for a variety of services – from opening an account, starting FDs, getting credit cards to availing loans. But its real significance came to the fore during the COVID pandemic.

Hyderabad:Banking in India has seen a major transformation in the last decade, especially due to the rapid advances in information technology. There has been a constant push towards paperless banking in order to make the process more productive and customer-friendly. Earlier this year, Indian banks and financial institutions took a major leap in that direction when the regulator allowed them to take new customers on board after video-based verification.

In January 2020, the Reserve Bank of India (RBI) issued a notification, officially recognizing the video-based KYC (know your customer) authentication as a customer identification process. But its real significance was understood only when the Coronavirus pandemic struck the country immediately thereafter.

The social distancing protocol followed across the country made it difficult for customers to open an account in any bank as a branch visit is usually required for the purpose to fill up necessary forms, or otherwise agents visit the customers to collect documents and signatures.

But video KYC authentication solved the issue as customers could do full-fledged banking – from opening a bank account, getting credit cards, starting FDs to availing loans -- without visiting a branch or any agent.

Notably, a basic bank account could still be opened earlier online through Aadhaar or digital KYC, but for full-service accounts, physical paper documentation was still mandatory until video KYC was allowed. Here is a detailed look at the video KYC process.

What is video KYC?

Video KYC is basically capturing a live photo of the client with his/her official documents such as the Aadhaar card or any other valid government document that establishes identity. It is an alternate method for completing customer KYC process without having to physically meet the customer.

When was it proposed?

The need for video-KYC was proposed in the report of the Expert Committee on Micro, Small and Medium Enterprises (MSMEs), headed by former chairman of the Securities and Exchange Board of India (SEBI) UK Sinha in June 2019. The panel said that conducting e-KYC was not serving the purpose as the customer still had to be physically present and the whole process took lots of data handling.

Which banks provide video KYC?

Since last month, lot of mainstream banks like ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC-First Bank, IndusInd Bank etc have been launching video KYC services. Other than that, digital payment platforms like Paytm have also started using video KYC to verify new customers.

How is video KYC done?

Here’s the step-by-step process for completing video KYC:

• Customers need to register on the website or mobile app of the banking entity
• The customer schedules a date and time for the onboarding process to start
• An official from the banking entity initiates the process by inviting the customer to a video call
• The official then verifies the customer’s Aadhaar card or other government documents
• The official asks the customer to display their PAN card, whose image is captured and authenticated
• The official also verifies the customer’s real-time location using geo-tagging software
• The official then matches the customer’s image captured on video with the image in the PAN card using facial matching capabilities or artificial intelligence (AI) tools
• The official asks the customer three random questions to ensure that it is a live interaction
• The session is concluded and the official decides whether or not to accept the customer’s video KYC information
• As per the rules, customers get account details on their registered email ID and mobile numbers within eight hours of the bank completing the video KYC process.

Key things to keep in mind

As per RBI guidelines, the video KYC should be carried out only via a bank’s website or its mobile application. There is no requirement for any third-party video calling application such as Zoom, WhatsApp, Google Duo and Skype.

Customers should also keep in mind that business correspondents and other outsourced agents have not been given approval to perform video KYC. Only officials from regulated entities can complete the remote onboarding process.

Also, in case the video KYC process gets interrupted due to poor connectivity and the process is suspended midway, the customer must restart the process again or it may not count.

(ETV Bharat Report)