RBI issues draft norms on Aadhaar-enabled pay system touchpoint ops
This story was originally published at 19:16 IST on 31 July 2024
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--RBI issues draft norms on Aadhaar-enabled pay system touchpoint ops
--RBI seeks views on Aadhaar-enabled pay system draft norms by Aug 31
NEW DELHI – In light of recent instances of frauds perpetuated through Aadhaar-enabled payment system, the Reserve Bank of India today issued draft directions for streamlining the process for onboarding of Aadhaar-enabled payment system touchpoint operators and ongoing due diligence. The central bank has sought feedbacks on the draft directions on or before Aug 31.
The draft norms come after the RBI at the February policy meeting proposed to streamline the onboarding process of Aadhaar-enabled payment system, in order to enhance security.
"In recent times, there have been instances of frauds perpetuated through AePS (Aadhaar-enabled payment system) due to identity theft or compromise of customer credentials. To protect bank customers from such frauds, and to maintain trust and confidence in the safety and security of the system, a need is felt to enhance the robustness of AePS (Aadhaar-enabled payment system)," the RBI said.
Aadhaar-enabled payment system is a payment system operated by the National Payment Corporation of India that facilitates interoperable financial transactions using the Aadhaar authentication.
Under the draft regulations, banks are directed to carry out due diligence of all Aadhaar-enabled payment system touchpoint operators onboarded on it. Further, banks are directed to carry out an update of Know Your Customer, or KYC, in cases where an Aadhaar-enabled payment system touchpoint operator has not performed any financial transaction for a continuous period of six months, before enabling them to transact further.
The draft rules direct the National Payment Corporation of India and banks to ensure that any Aadhaar-enabled payment system touchpoint operator is onboarded only by one acquiring bank. Acquiring bank is a bank which onboards the Aadhaar-enabled payment system touchpoint operators.
The draft norms listed principles under which banks should monitor the activities of Aadhaar-enabled payment system touchpoint operators on an ongoing basis. Under this, banks are directed to set transaction limits for Aadhaar-enabled payment system touchpoint operators based on their risk profile and the transactions shall be consistent with operators' location of operation and risk profile.
Banks and National Payment Corporation of India shall ensure compliance to these directions within three months from the date of issue, the RBI said. End
Reported by Pratiksha
Edited by Deepshikha Bhardwaj
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