The Reserve Bank of India (RBI) extended the deadline that was imposed for e-wallet users to update their Know Your Customer (KYC) details on the applications. Before the extension, all users were expected to make the update by February 28.
The RBI extended the deadline by 6 months after various domestic internet groups and mobile wallet firms pushed for an extension.
Majority of the user base i.e. almost 70 to 80 per cent of mobile wallets had not submitted KYC details and going by the previous deadline, all these users would have been banned from the application if they hadn’t updated the details.
E-wallets, earlier, depended on Aadhaar for KYC processes but post the Supreme Court’s order barring private entities from mandating Aadhaar linking, the KYC process has been delayed further. The Supreme Court’s ruling also increased the costs incurred by these entities on KYC procedures.
Initially, a simple KYC verification would be done with the help of a one-time password (OTP) but as per latest guidelines, a complete KYC procedure needs to be conducted, which includes submission of ID and address proof documents.
It has been observed that some users have switched to UPI platforms as they do a direct transfer of money from one bank account to another, without the need of a wallet. According to data released by the RBI and NPCI, UPI witnessed 525 million transactions, whereas mobile wallets saw 350 million transactions in the month of November, a 5 per cent drop.
Source: Times of India