The government is preparing to change the prevention of money laundering (PMLA) to bring such a risk -based frame, two people who were aware of the development. Currently, financial institutions are loading a uniform KYC process for their customers regardless of risk.
“The changes would align both the Reserve Bank of India regulations and the wider standards of compliance with PMLA regulations, which would streamline the process on board KYC and improve overall customer experience,” one of the above people said on anonymity.
The Indian complex network of KYC regulations often leads to significant headaches for both financial institutions and individuals due to the need for repeated documentation and different requirements across different entities. The current system can be cumbersome and time consuming and requires more information to different information to different agencies. Changing PMLA is trying to fix.
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“There are a number of agencies that repeatedly collect and verify the data to update the records of KYC,” the other person added. “However, if the financial institution has evaluated the customer’s risk profile and the account is active, such frequent validation is unnecessary; the aim of the proposed changes to the PMLA rules is to make this process more efficient,” the person added.
The key pillar of the KYC reform is this year’s introduction of the revised central register KYC Records (CKYCRR), which aims to speed up digitization, improve record sharing across financial institutions and simplify KYC updates. CKYCR aims to remove more verification KYC by creating a central storage where customers once present their data.
A spokesman for the Ministry of Finance did not answer e -mail questions.
The CKYCR revision plan includes verification of data and documents with the issuing authorities, which makes the register a reliable source of records of KYC. AI and face recognition technologies will be used for dedication and ensure that only a gold record remains – one and a definitive record without duplicates.
Customers will only have access to KYC details and can apply for repairs and facilitate current records in the registry.
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Economists have stated that KYC reforms are required, in particular by extending the update intervals and the admission of the risk -based access, which would improve comfort and reduce compliance costs.
“Reforms in KYC are required and changes to the request for an update for a longer period are required,” said Madan Sabnavis, chief economist, Bank of Baroda.
He added that the individual’s approach was used to distinguish individuals, which helped reduce the cost of compliance and at the same time improve comfort.
The government is also planning to integrate KYC with digital deck digital deck, improve customer comfort and access to financial services. Verification of OTP/Face ensures customers’ consent for the use of personal data to increase data confidence in data.
Reforms will provide metadata financial institutions to strengthen confidence in the CKYCR register and the model free of charge will support further digitization.
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Simplified KYC updates will also significantly reduce turnover times for record updates across financial institutions.
Certainly, the turnover time to update KYC records across financial institutions has already decreased significantly with the implementation of CKYCR, which will further improve when introducing a revised system.
This centralized system allows FIS to access and verify KYC information electronically and minimize the need for repeated data collection.
To date, it has digitized approximately 990 million records and increased record interoperability between FIS, with a total of about 1,360 million records.
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