RBI Releases Draft Rules For Aadhaar Enabled Payment System

The Reserve Bank of India, on Wednesday, streamlined the guidelines related to the onboarding process of Aadhaar-enabled touchpoint operators and released a draft version of it.

According to the circular, all acquiring banks have to carry out due diligence on all AePS touchpoint operators that are onboarded by it. This process has to be in accordance with the customer due diligence procedure, which has been laid out in RBI's master directions on KYC since 2016.

As part of the onboarding process, the acquiring banks are required to carry out an update of KYC in cases where the AePS touchpoint operator did not perform any financial transactions for six months at length. Without this process, the touchpoint operator will not be allowed to transact.

Further, both the National Payments Corp. of India and acquiring banks have to ensure that any AePS touchpoint operator gets onboarded by only one bank.

As part of the due diligence, the acquiring bank has to monitor all activities of AePS touchpoint operators regularly and also set operational parameters.

The transaction limits have to be set for AePS touchpoint operators based on their risk profiles and have to be consistent with their location of operation, the RBI circular said.

Since multiple system operators are involved in this process, they have to comply with rules issued by NPCI, the circular added.

The draft guidelines have been issued for comments and feedback from industry participants, which can be sent by Aug. 31.

The development comes after RBI Governor Shaktikanta Das, in his June monetary policy address, said that the regulator would enhance the robustness of AePS.

This system enables customers to perform digital transactions in assisted mode. However, with increasing instances of fraud perpetuated through AePS, especially due to identity theft or compromise of customer credentials, draft guidelines with changes have been issued.