May the Wallet users beware of

BE/RBI NOTE/38/2018

Mobile wallet companies submit monthly status reports to RBI.  This is being closely watched and monitored by Reserve Bank of India.

1. RBI checks as to how many wallet users have created and how many of them have completed authentication or Know Your Customer formalities in line with the RBI directives.
2. In an ecosystem users of mobile Wallets can be considered to be very low though one fourth of Wallet users have completed the KYC compliance which again is valid for 12 months.
3. The conditions are:
   1. A full KYC compliance is complied with physical verification or a bio-metric check and
   2. A minimum KYC compliance can be done via mobile handset using an one time password.
4. Further, RBI directives clearly mandates that:
   1. Mobile wallets with minimum customer details like a mobile and validated using a Government recognized identity proof is valid only for 12 months.
   2. Subsequent full KYC should be done, to keep the wallet active.
5. Unlicensed entities’ mobile number based Aadhar authentication has been disable by UIDAI. This has resulted in completing the Customer Identification process difficult.
6. Most of wallet companies do not have physical infrastructure to collect bio-metric details.
7. They depend on mobile number based authentication for KYC compliance and the stoppage has handicapped them. Thus they are unable to even store the number for future reference.

Risk Factors:

• Mobile interoperability which is coming up soon is expected to increase the systemic risks .
• Thus timely compliance of KYC would be more essential.
• New regulatory limits will open new opportunities and it is for the Wallet companies to use these opportunities effectively.