V-CIP process for online KYC of individuals, proprietor and companies

Video-based Customer Identification Process (V-CIP) is an alternate method of customer identification with facial recognition and customer due diligence by an authorised official of the Regulated Entities (REs) like banks and other financial institutions.

In the V-CIP process your KYC documents and signature are verified on a real-time basis through seamless, secure, live, informed-consent-based audio-visual interaction with the customer so as to obtain identification information required for Customer Due Diligence (CDD) purposes. Such processes complying with prescribed standards and procedures shall be treated on par with the face-to-face Customer identification process (CIP) for the purpose of this Master Direction.

The amendment to the Master Direction of KYC broadens the purview of Video KYC & systematizes the infrastructure and procedure for V-CIP, allowing for widespread usage & adoption.

V-CIP is now applicable to individual customers and proprietors in the case of proprietorship firms authorised signatories & beneficial Owners in the case of Legal Entity (LE) customers.

For opening an account in the name of a sole proprietary firm, the CDD of the individual (proprietor) shall be carried out. In addition to the proprietor’s individual CDD, Bank has to obtain any two of the following documents or e-documents there as proof of business/activity in the name of the firm. Registration certificate/licence, tax returns, GST certificate, Import export code (IEC) issued by the DGFT, Utility bills, etc. In cases where the REs are satisfied that it is not possible to furnish two such documents, REs may, at their discretion, accept only one of those documents as proof of business/activity.

Use of printed copy of equivalent e-document including e-PAN is not valid for the V-CIP. The authorised official of the RE shall ensure that a photograph of the customer in the Aadhaar/OVD and PAN/e-PAN matches with the customer except in the case of e-PAN is obtained. Use of printed copy of equivalent e-document including e-PAN is not valid for the V-CIP.

All accounts opened through V-CIP shall be made operational only after being subject to concurrent audit, to ensure the integrity of the process and its acceptability of the outcome.

Assisted V-CIP shall be permissible when banks take the help of Business Correspondents (BCs) facilitating the process only at the customer end. Banks shall maintain the details of the BC assisting the customer, where the services of BCs are utilized. The ultimate responsibility for customer due diligence will be with the bank.

The bank will ascertain the veracity of the information furnished by the customer through independent verification and maintaining an audit trail of the process. V-CIP process can also be used for conversion of existing accounts opened and Updation/Periodic updation of KYC for eligible customers.

Regulated entities opting to undertake V-CIP shall have adequate Infrastructure for customer identification as per RBI guidelines on minimum baseline cyber security and resilience framework for banks, as updated from time to time as well as other general guidelines on IT risks. The technology infrastructure should be housed in own premises of the RE and the V-CIP connection and interaction shall necessarily originate from its own secured network domain. Where the cloud deployment model is used, it shall be ensured that the ownership of data in such model rests with the RE only and all the data including video recording is transferred to the RE’s exclusively owned/leased server(s) including cloud server, if any, immediately after the V-CIP process is completed and no data shall be retained by the cloud service provider or third-party technology provider assisting the V-CIP of the RE.

The V-CIP application software and relevant APIs / web services shall also undergo appropriate testing of functional, performance, and maintenance strength before being used in a live environment. Only after the closure of any critical gap found during such tests, the application should be rolled out. Such tests shall also be carried out periodically in conformity with internal/ regulatory guidelines.

To know the ‘AMENDMENT TO PREVENTION OF MONEY LAUNDERING ACT AND IMPACT’
click Prevention of Money Laundering

To know the latest changes in KYC click: Amendment

To know the latest amendment related to customer due diligence click: CDD

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