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Informist, Friday, Jun. 27, 2025
--RBI issues norms on Aadhaar-enabled payment system operators' due diligence
--RBI norms on Aadhaar-enabled payment system operators to take effect Jan 1
NEW DELHI – The Reserve Bank of India Friday issued final directions for due diligence on Aadhaar-enabled payment system touchpoint operators. The norms will be effective from Jan. 1.
The central bank had issued draft guidelines on the subject in July. The guidelines released Friday cover both due diligence requirements applicable to such touchpoint operators and risk management instruments governing their activities. According to the National Payment Corp. of India, 36 mainline commercial banks offer Aadhaar-enabled payments systems with a variety of functionalities.
The Aadhaar-enabled payment system touchpoint is the terminal deployed by acquirer banks to facilitate such transactions, which shall include both mobile and fixed points, the RBI said. The individual who operates the touchpoint will be onboarded by a bank, which will be termed as an "acquirer bank". The bank shall adopt the same process before onboarding the operators as laid down in the central bank's know-your-customer directions for customer due diligence.
"However, if the due diligence of ATOs (the operators) has already been done in their capacity as Business Correspondent / subagent, then the same may be adopted. The acquiring bank shall also carry out periodic updation of KYC of ATOs," the regulations released Friday said. In case the operator has not conducted a financial or non-financial transaction for a customer for at least three months, banks must conduct the know-your-customer check before the operator conducts any further transactions.
The acquiring bank shall then monitor the activities of such operators through their transaction monitoring systems on an ongoing basis. The bank shall set operational parameters based on the business risk profile of the operators, the RBI said. The location and type of the operator and the volume and velocity of transactions must be watched under the bank's fraud risk management framework. The acquiring bank must also ensure that any technological integrations like application programming interfaces are only used for enabled Aadhaar-enabled payments.
"The operational parameters regarding ATOs (the operators) shall be reviewed on a periodic basis, reflecting emerging fraud trends," the RBI said. End
Reported by Aaryan Khanna
Edited by Akul Nishant Akhoury
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