Author: Abhishek R. Sharma

Does Know Your Customer (KYC) plays an important role for me? 🕵‍♂️ 🕵‍♀️

KYC is a process of due diligence wherein the applicant for financial services is identified and verified by the financial institutions using officially valid documents such as National Security Cards, other Govt. IDs.

KYC is an important, mandatory process that helps in managing the risk of impersonation and fraud using wrong identity documentation for availing financial services such as Banking a/c, Securities a/c, Insurance Policies, Loans, etc.

Why India’s regulatory framework is robust to help every Indian towards safe financial services?

– Strong institutions and regulatory regimes such as RBI, SEBI, IRDAI
– Strong regulatory framework such as Master Directions on KYC
– Globally renowned and tech-enabled officially valid documents
– Strong and world’s best identity management system such as #aadharcard. The penetration of citizens with Aadhaar is almost 90%
– Process of digital KYC including e-KYC, XML-based KYC, OTP Based KYC, Video-based KYC
– Robust and best tech-enabled banking, financial services, and payments systems such as IMPS, UPI, ATM, Card network
– A strong and vigilant enforcement framework under PMLA 2002, UAPA, RBI Act, and Banking Regulations Act.

Do you agree that India is nicely poised for being a #developed #country by the year 2047 when we will celebrate the 100th year of our colonial past?

What should I know as a Chief Compliance Officer to make my Compliance Program Succeed? 👨‍🏫 👩‍🏫

According to Deloitte and Compliance Week, only 70% of firms even try to measure the effectiveness of their compliance programs. And of those that do, only a third are either confident or very confident that they are using the right metrics #compliance (Source: HBR Article)

Measuring the effectiveness of the compliance program is much talked about not only in India but many other countries such as the US, and the UK.

In recent times, RBI (India’s Apex Bank) has further strengthened the Compliance Function in Banks and NBFCs by providing clear mandates, expectations, and guidance. If you take a close look at the recent RBI’s penal action it primarily hovers around non-compliance to KYC/AML, Fair Practices Code, Governance Mechanisms, and Lending Practices.

#india #banks #compliance #complianceofficer #complianceprogram

Here are the 5 key pointers (refer to the picture) which are prominent in India for a Compliance Function, especially for the role of the CCO in the Financial Services

My key 5 takeaways are :

1) Specific compliance policy contours are clearly defined
2) Clarity on the role, appointment, removal, and eligibility criteria of CCO
3) Fit & Proper process for CCO
4) CCO’s reporting lines and the principle of independence
5) Last but not least – like CROs, CCOs can’t dual hat roles except for MLROs.

#financialservices #humanresource #business

UPI network will facilitate payments financed by credit from banks.
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– Unified Payments Interface (UPI) is a robust payments platform supporting an array of features.
– Presently it handles 75% of the retail digital payments volume in India.
– The UPI system has been leveraged to develop products and features aligned with India’s payments digitization goals.
– Recently, RuPay credit cards were permitted to be linked to UPI.
– At present, UPI transactions are enabled between deposit accounts at banks, sometimes intermediated by pre-paid instruments including wallets.
– It is now proposed to expand the scope of UPI by enabling transfer to/from pre-sanctioned credit lines at banks, in addition to deposit accounts.
– In other words, the UPI network will facilitate payments financed by credit from banks.
#Benefits – This can reduce the cost of such offerings and help in the development of unique products for Indian markets.

#rbi #rbipolicy #upipayment #upi #npci #payments

PRAVAAH – The Flow…..

“PRAVAAH” is a Platform for Regulatory Application, Validation And AutHorisation :

– Various entities are required to obtain license/authorization to carry out activities regulated by RBI.
– Further, regulated entities are required to seek certain regulatory approvals from RBI under various statutes/regulations periodically.
– Currently, the application and approval processes for the same take place in varied online and offline modes.
– The Union Budget for 2023-24 has announced the need to simplify, ease and reduce the cost of compliance by financial sector regulators within laid down time limits to decide the applications under various regulations.
– It has been decided to develop a secured web-based centralized portal named ‘PRAVAAH’
– Platform or Regulatory Application, Validation, And AutHorisation) which will gradually extend to all types of applications made to RBI across all functions
an important step towards Ease of Doing Business by RBI/Govt of India.
– This will help businesses, and start-up seeks regulatory approvals.
– This will help reduce the cost of compliance and procedural challenges including timely responses.

#rbi #startup #business #approvals #compliance

Enhancement of the Cap under e-RUPI (Prepaid digital Vouchers using UPI)

What is e-RUPI?

The e-RUPI prepaid digital voucher, developed by the National Payments Corporation of India (NPCI) and launched in August 2021, is a person-specific and purpose-specific cashless voucher and can be used by individuals, corporates, or governments.

e-RUPI runs on the UPI platform and has a cap of ₹10,000/- per voucher and each voucher can be used/redeemed only once.

Present Use Cases?
e-RUPI vouchers are presently being used largely for COVID-19 vaccination purposes. There are other use cases being actively considered by various State Government and Central Government Ministries / Departments.

New Changes – Limits Enhancements?

To facilitate the digital delivery of various government schemes to the beneficiaries, it is proposed to increase the cap on the amount for e-RUPI vouchers issued by Governments to ₹1,00,000/- per voucher and allow the use of the e-RUPI voucher multiple times (until the amount of the voucher is completely redeemed).

To follow?
Necessary instructions to NPCI will be issued separately.

#payments #digital #india #covid #npci