NBFCs receive permission to use Aadhaar-based bank KYC to give loans

Tuesday 27 August 2019 10:45 CET | News

Non-banking financial companies have been permitted to use the Aadhaar-based bank mandated KYC to avoid repeating the process for the customers.

This will increase convenience for customers as they will not need to undergo the KYC process again when applying for loans from NBFCs, if they have already got their KYC done at a bank. Currently, a customer is required to undergo KYC process again and again with the different financial institutions. The move will facilitate and quicken up the process of availing credit.

The government recently amended the Prevention of Money Laundering (PMLA) Act to allow digital KYC. The amendment clarifies the various modes by which banks and NBFCs can capture the customers data electronically, and it allows the financial entities to capture full details through eKYC. Thus, the need to provide the physical documents is eliminated.

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: NBFCs, Aadhaar, banks, KYC, loans, non-banking, KYC, financial institutions, eKYC, PMLA, money laundering
Countries: World