In a major setback for digital wallets or prepaid payment instrument (PPIs), RBI has declined to extend the deadline for the mandatory KYC (Know Your Customer) compliance beyond February 28. According to the master directions issued last October, all customers of 55 PPIs and another 50 wallet providers have to be KYC-compliant by Feb 28.
Full KYC requires users to link their wallet or PPI account with their Aadhaar number. Some other documents like residential proof are needed too. The RBI had earlier given time till December 31, 2017, to make PPI accounts KYC-compliant. Later, was extended to February 28 after a number of players sought more time as they felt that the KYC norms were tough. But currently, customers who have submitted their KYC details are a minority, which is why service providers were hoping the central bank will go soft.
However, if this happened, then e-wallet companies will lose it’s users and it’s players fear that the country is going back to cash from cashless options. If PPI issuers do not obtain KYC related inputs within given deadline from their customers, then customers will not lose their money. However, customers who have balances in such wallets or prepaid payment instruments (PPIs) need not worry about their money even if they do not do the KYC (know-your- customer) norms, the central bank said.
Meanwhile, RBI had warned that those failing to comply within a year would face severe operational restrictions. To note, PPIs were feeling that the KYC-requirement was challenging and if the guidelines were to be implemented, they feared losing business as 90% customers have been on boarded using the minimum KYC, which is giving the telephone number.
