Post Office Introduces Paperless KYC System
The Indian postal department is set to revolutionize the way customers open and manage their Post Office Savings Bank (POSB) accounts. Starting January 6, 2025, the department will implement a paperless Know Your Customer (KYC) system. This new system will allow customers to open accounts and conduct transactions using Aadhaar biometric verification. The initiative aims to streamline the account opening process and enhance customer convenience.
Phased Implementation of eKYC
The implementation of the eKYC system will occur in phases. The first phase will focus on registering new customers. This includes creating a Customer Information File (CIF) and initiating individual Post Office Savings Accounts (POSA) at Departmental Post Offices through Aadhaar-based eKYC authentication. Customers who consent to the Aadhaar eKYC will have their details fetched from the Central Identities Data Repository (CIDR) of the Unique Identification Authority of India (UIDAI). This process will automatically retrieve essential information such as the customer’s name, date of birth, gender, and address.
If the system fails to retrieve the father’s or husband’s name, customers can manually edit this information. However, if other data cannot be fetched, customers will need to follow the standard CIF creation process. The second phase will expand the eKYC framework to include various transactions, such as opening and closing accounts for different savings schemes. This includes the Recurring Deposit, Time Deposit, Monthly Income Scheme, and Senior Citizens Savings Scheme. The eKYC system will also facilitate the creation and management of joint, minor, and authorized savings accounts.
Enhanced Transaction Capabilities
With the introduction of the eKYC system, customers will enjoy enhanced transaction capabilities. Transactions linked to eKYC can be processed through Aadhaar authentication or traditional paper vouchers. For deposits made by individuals other than the account holder, a pay-in slip will be mandatory. Notably, Aadhaar-authenticated transactions will not require vouchers for deposits or withdrawals up to ₹5,000. However, third-party deposits will still necessitate paper-based processing with pay-in slips.
The postal department has emphasized the importance of maintaining customer privacy. All post offices must display Aadhaar numbers in a masked format (XXXX-XXXX) on all records and documents. Postmasters are instructed to obscure the initial eight digits of unmasked Aadhaar numbers using black ink or sketches. This measure aims to protect customer information while ensuring compliance with the new eKYC regulations.
Customer Consent and Documentation
To facilitate the eKYC process, the postal department will require customer consent. While physical presence is not mandatory for account opening through SAS or MPKBY agents, the department advises completing e-KYC verification during the account creation process. Customers will need to provide a physical consent form for Aadhaar e-KYC, along with a specimen signature. This signature will be uploaded into the Finacle system, which is the software used for managing banking operations.
The order also states that changes related to other POSB schemes and improvements in the eKYC process are still pending. Until these changes are implemented, customers will need to provide consent in physical form. The postal department is committed to ensuring a smooth transition to the eKYC system while maintaining the integrity and security of customer information.
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