'Fin Secy-led expert panel on uniform KYC norms has been in existence for a while'

Finance Secretary TV Somanathan

A government expert committee, headed by Finance Secretary TV Somanathan, to formulate uniform Know Your Customer (KYC) rules has been in existence for a while, a senior ministry official said.

"Yes, there is such a panel that is being headed by Finance Secretary, but this was formed a while back," this official said.

According to media reports, the committee comprises several government departments and ministries, including the Ministry of Corporate Affairs.

At the 28th Meeting of the Financial Stability and Development Council (FSDC) on February 21, the Council said it will formulate strategy to simplify and digitalise KYC process in the financial sector.

The FSDC also discussed various issues related to formulation of strategy for implementing the decisions of the FSDC, including prescribing uniform KYC norms, inter-usability of KYC records across the financial sector, and simplification and digitalisation of the KYC process.

On February 26, Finance Minister Nirmala Sitharaman, in a meeting with representatives from the fintech industry, addressed the issue of complying with KYC regulations.

The topic of KYC is being widely discussed of late following Reserve Bank of India's clampdown on Paytm Payments Bank (PPBL) over several compliance violations. The restrictions were triggered by a probe, which raised concerns about money laundering and violation of KYC norms by the entity.

The RBI has imposed major business restrictions on PPBL, including on accepting fresh deposits and doing credit transactions after February 29. This timeline was later extended to March 15.

One 97 Communications Ltd (OCL), the parent company of the fintech brand Paytm, announced on February 26 that its associate bank, PPBL, has restructured its Board of Directors and as part of this move Vijay Shekhar Sharma, founder and majority owner resigned from the board and also vacated his part-time non-executive chair role.