RBI allows banks to use Aadhaar with customer’s consent for KYC purpose

Reserve Bank updated its list of documents required for identification of individuals, thereby including Aadhaar which can be used for verification with consumer consent.
 
RBI, responsible for regulating Know Your Customer (KYC) norms has allowed banks to conduct the authentication/offline verification of an individual using Aadhaar for identification. 
 
In February, the Union Cabinet had approved the ordinance allowing voluntary use of Aadhaar as identity proof for opening a bank account or obtaining a mobile connection. 
 
RBI stated that ‘Proof of possession of Aadhaar number’ has been added to the list of Officially Valid Documents (OVD). 
 
RBI has informed that for customer identification of individuals seeking benefits or subsidy under the direct benefit transfer (DBT), the banks should obtain the Aadhaar number and they may carry out e-KYC verification. On the other hand, for non-DBT consumers, the Regulated Entities (RE’s) are bind to obtain a certified copy of any OVD that contains details of consumer’s identity and address along with a recent photograph.
 
RE’s should be careful that the customers falling in non-DBT beneficiary category redact or blackout their Aadhaar numbers as per terms of sub-rule 16 of Rule 9 of the amended PML Rules.
 
For non-individual customers, the amendments made in the KYC norms further stated requirement of PAN (Permanent Account Number) /Form 60. PAN should be obtained in case of companies and partnership firms apart from other requisite documents of entity. The PAN/Form 60 of the authorised signatories shall also be obtained. 
 
Form 60 is mandatory for an individual who does not have a PAN.   
 
For existing account holders, PAN or Form 60 is to be submitted within the stipulated time as notified. Failure to submit the the same shall result into the account getting ceased till PAN or Form 60 is submitted. However, before taking such action, the RE’s shall issue a notice to the customer.
 

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Changes in Our Business Model
 
 
25th Sept 2020
 
Greetings from Moneylife Advisory Services
 
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
 
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
 
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
 
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
 
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
 
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
 
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
 
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Debashis Basu
Founder