RBI’s strict KYC norms to keep e-wallets safe
Customers can now move money between wallets of different companies and banks seamlessly through Unified Payments Interface (UPI) provided they complete full KYC formalities, like they do for bank accounts.
Mobile wallets, which have been conforming to a minimum KYC format (like a simple verification of mobile number) will have convert to full KYC wallet within 12 months of opening it.All existing wallet users have to convert to the full KYC format by this year end.
The RBI said minimum KYC wallets cannot have a balance of more than Rs 10,000 and this can be allowed only for purchase of goods and services and not for remittances to other wallets or bank accounts. Full KYC wallets will have a limit of Rs 1 lakh and all facilities for fund transfer will be allowed.
Although the wallet industry was pushing for minimum KYC norms, the RBI guidelines show that only serious players with deep pockets will be able to enter the payments space.
“The fact that 12 months has been given for conversion of wallets into full KYC ones shows that they have enough time to convince customers to complete KYC requirements,” said Naveen Surya, chairman of Payments Council of India, the industry body for payments players. “I believe, by then, the KYC for mobile numbers can be completed and Aadhaar rails might improve, making it easier to get KYC formalities done.”
RBI has also increased the networth requirements for players in this space. For a PPI licence, companies need a positive networth of Rs 5 crore at the time of application against Rs 2 crore previously. This has to be Rs 15 crore within the third financial year of receiving RBI authorisation.
“The higher positive networth requirement for wallets is justified because RBI is recognising wallets as a serious financial services space,” said Vijay Shekhar Sharma, founder of Paytm.
“If money will be moved across wallets of different companies, they will need that higher capital to be able to support such transactions.” RBI has also increased the limit on the amount that can be transferred from wallets to Rs 1 lakh. It also allowed inward international remittance for wallets, with an upper limit of Rs 50,000.