![\"RBI](\"https:\/\/melento.ai\/en-in\/blog\/wp-content\/uploads\/2020\/01\/RBI-issues-landmark.jpg\")
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Reserve Bank of India<\/a> (RBI)<\/strong> has issued a notification dated 09th January 2020, officially recognizing the Video-Based Customer Identification Process (VCIP)<\/strong><\/a> as a method of customer identification. This comes as a welcome relief to Banks and other Regulated Entities (RE), which fall under the regulatory purview of RBI, seeking an alternative to other recognized KYC solutions. This process enables presence-less customer onboarding by banks and other entities.<\/span><\/p>\n The Know Your Customer Direction, notified by RBI and updated from time to time, is issued under the Prevention of Money Laundering Act, 2002 (PMLA)<\/strong>. The said Master Direction mandates the Regulated Entities to follow certain Customer Identification Procedure, for undertaking transactions and establishing an Account-Based relationship.<\/span><\/p>\n Prior to this amendment, in addition to the traditional process for Customer Identification, Aadhaar-based KYC Authentication<\/a> was the only online mode available to Regulated Entities under the RBI Master Direction. The said Aadhaar online KYC authentication (OTP-based) process had the following drawbacks-<\/span><\/p>\n In the month of September 2018, by a mammoth 1448 page Judgment, the Hon\u2019ble Supreme Court of India restricted the operation of Section 57 and held the use of Aadhaar Authentication by Private Entities to be unconstitutional<\/span>.<\/p>\n In the month of<\/span> May 2019<\/strong>, Offline Verification using Aadhaar was introduced as a method of customer identification for customers of Regulated Entities by RBI, through the method of an amendment to the Master Direction to KYC<\/strong><\/a>.<\/span><\/p>\n The said amendment notification brought about the following changes-<\/span><\/p>\n In the month of August 2019, The Ministry of Finance released the<\/span> Prevention of Money Laundering (Maintenance of Records) Third Amendment Rules,2019<\/a>.<\/strong> The aforesaid amendment introduced the concept of Digital KYC<\/a><\/strong> and defined Digital KYC as the following-<\/span><\/p>\n \u201cDigital KYC<\/strong><\/a>\u201d means capturing live photo of the customer and officially valid document or the proof of possession of Aadhaar, where offline verification cannot be carried out, along with the latitude and longitude of the location where such live photo is being taken by an authorized officer of the RE as per the provisions contained in the Act.<\/span><\/p>\n The said procedure was not completely digital in nature as it involved manual procedure of printing the Digitally signed (Customer Application Form)\u00a0 CAF and physical signature of the customer on the same. It also envisaged the customer\u2019s physical presence in the Regulated Entities\u2019 office or vice versa, contributing to enhanced measures for anti-money laundering<\/a> compliance.<\/span><\/p>\n The present amendment dated 09th January 2020<\/a>, introduces Video-Based Customer Identification process(VCIP) in addition to the existing KYC process, thereby eliminating the drawback of \u201cDigital KYC<\/a>.<\/strong><\/span>\u201d<\/span><\/p>\n \u201cVideo-Based Customer Identification Process (VCIP)<\/a>\u201d\u00a0<\/strong>a method of customer identification by an official of the RE by undertaking a seamless, secure, real-time, and consent-based audio-visual interaction with the customer, to obtain identification information including the documents required for Customer Due Diligence purpose, and to ascertain the veracity of the information furnished by the customer. Such a process shall be treated as a face-to-face process (the equivalent of OSV – Originally Seen and Verified process) for the purpose of this Master Direction.\u201d<\/span><\/p>\n The process envisaged by the latest amendment is completely remote –<\/span><\/p>\n The Amendment notification further mandates geo-tagging for ensuring that the customer is from India, obtaining customer consent before initiation of interaction, recording of audio-visual interaction, and storage of the audiovisual interaction. The amendment notification recommends the usage of face matching and Artificial Intelligence to make the system foolproof.<\/span><\/p>\n Banks and NBFC now have an option to remotely authenticate and identify customers, and fulfill the OSV requirement remotely, without the presence of the customer. The amendment notification clarifies that this form of Video-Based Customer Identification<\/strong><\/a> process would be treated as a face-to-face process for the purpose of Master Direction.<\/span><\/p>\n The UIDAI<\/a><\/strong> approved Aadhaar number is considered as the proof of validation, thus ensuring a safe and secure submission from the user.<\/span><\/p>\n Melento (Formerly SignDesk) offers Scan.it<\/strong><\/a> – a real-time, AI-based onboarding application to verify customers at their convenience, complying with the RBI VCIP guidelines. Using Scan.it<\/strong><\/a>, the user can submit KYC information through a live-video and the financial institution\u2019s representative can verify and approve the document online.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" Reserve Bank of India (RBI) has issued a notification dated 09th January 2020, officially recognizing the Video-Based Customer Identification Process (VCIP) as a method of customer identification. This comes as a welcome relief to Banks and other Regulated Entities (RE), which fall under the regulatory purview of RBI, seeking an alternative to other recognized KYC […]<\/p>\n","protected":false},"author":3,"featured_media":6183,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"page_templates\/blog-new-3.php","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[14],"tags":[33,642,796,824,1153,1449,1947,2373],"class_list":["post-4084","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ekyc","tag-aadhaar","tag-digitalkyc","tag-e-kyc","tag-ekyc","tag-facial-recognition","tag-kyc","tag-rbi-kyc","tag-video-kyc"],"acf":[],"yoast_head":"\nMaster Direction- Know Your Customer Direction<\/strong><\/span><\/h3>\n
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Aadhaar Verdict<\/strong><\/span><\/h3>\n
Offline Verification<\/strong><\/span><\/h3>\n
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Prevention of Money-laundering (Maintenance of Records) Third Amendment Rules, 2019.<\/strong><\/span><\/h3>\n
Video-Based Customer Identification<\/strong><\/a> Process (VCIP RBI)<\/strong><\/span><\/h2>\n
Definition<\/strong><\/span><\/h3>\n
How does it work?<\/strong><\/span><\/h3>\n
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Benefits of VCIP RBI<\/strong><\/span><\/h3>\n
How can we help<\/strong><\/span><\/h3>\n