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Published on 14/09/2021 4:08:51 PM | Source: PR Agency

The latest notification will simplify customer onboarding for NBFCs, NBFC-Micro Finance Institutions By Manoj Chopra, Infrasoft Technologies Ltd

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Below are Views On The latest notification will simplify customer onboarding for NBFCs, NBFC-Micro Finance Institutions By Manoj Chopra, Head Innovation & Product Development, Infrasoft Technologies Limited

“The latest notification will simplify customer onboarding for NBFCs, NBFC-Micro Finance Institutions (NBFC-MFI), payment system operators and payment system participants. Earlier, NBFCs’ are reliant on offline Aadhar validation or paper-based authentication mechanisms like PAN verification. Since such methods involved sharing pictures of physical documents such as the PAN and Aadhar cards, it made the process slightly cumbersome and prone to rejections as the quality of pictures shared may not be up to the mark. Now, by availing Aadhar Authentication License – KYC User Agency (KUA) license or sub-KUA License these NBFCs can directly leverage an online database in Aadhar and verify the identity including the photograph seamlessly. Additionally, Aadhar validation also provides an additional layer of security against fraud. It does so by offering an additional OTP or biometric validation. So, when a financial institution authenticates a customer with Aadhar the photograph of the person along with their address is returned. This helps in ensuring that an authentic photograph is available for comparison as opposed to PAN where the photo can be possibly tampered with or photoshopped. Further, many NBFCs and MFIs are operating in semi-urban and rural areas. The new directive will enable them to onboard customers who may not have PAN cards or are not be willing to share their PAN card details. As Aadhar numbers are available with most people and they are relatively more comfortable sharing their Aadhar details, NBFCs will now be able to scale their customer base. While PAN may be used as a proof of identity (POI), you need an additional document for proof of address (POA). With Aadhar validation, NBFCs can complete their e-KYC with just the Aadhar number that serves as both a POI and a POA.”

 

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