In furtherance of the amendments introduced to (a) the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (“PML Rules”), by notification dated February 13, 2019; and (b) the Prevention of Money Laundering Act, 2002, by the Aadhaar and Other Laws (Amendment) Ordinance, 2019, the Reserve Bank of India (“RBI”) vide a notification dated May 29, 2019 (“Notification”), has amended the Master Direction - Know Your Customer (KYC) Directions, 2016 (“KYC Master Directions”).
Following are the key changes introduced to the KYC Master Directions pursuant to the Notification:
- Banks have been allowed to carry out Aadhaar authentication/ offline-verification of an individual who voluntarily uses his Aadhaar number for identification purpose. [paragraph 16 of KYC Master Directions]
- ‘Proof of possession of Aadhaar number’ has been added to the list of Officially Valid Documents. [paragraph 3(ix) of KYC Master Directions]
- Regulated Entities (“RE”) shall ensure that the customers while submitting Aadhaar for Customer Due Diligence, redact or blackout their Aadhaar number in terms of rule 9(16) of the PML Rules. [paragraph 16 of KYC Master Directions]
- REs other than banks may identify a customer through offline verification under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, with his/her consent. [paragraph 16 of KYC Master Directions]
The KYC Master Directions have been updated to reflect the changes introduced by the Notification.
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