Counter-productive move

RBI's new KYC norms may shrink the digital wallet industry

The imposition by the Reserve Bank of India (RBI) of stringent Know Your Customer (KYC) norms for the digital wallet industry could be a serious impediment to the financial technology industry’s growth. Prepaid payment instruments, or PPIs, as digital wallets are technically defined, operate two types of accounts, both tied to a smartphone mobile number. One is a “non-KYC” minimum-balance account, with strict restrictions on monthly transactions and a maximum balance. The other type of account requires e-KYC, using Aadhaar. New guidelines for PPIs are supposed to set the stage for full interoperability among these smartphone apps. The RBI wants