The Reserve Bank of India may introduce a new mode of digital authentication for verification of customers for financial institutions, the Economic Times reported citing sources privy to the plan.
RBI officials in a meeting with industry executives last week indicated that the apex bank is keen on introducing a digital authentication method that would use the XML internet format to extract limited information on customers from the Aadhaar database which will not include biometrics collected while generating Aadhaar digital identities for residents of India, the business daily said.
According to the report, industry suggested for using video as an alternative to Aadhaar biometrics-based customer verification, which was barred by the Supreme Court earlier this year. However, RBI wants live video rather than recorded videos, the publication quoted unnamed industry executives as saying.
“RBI is more keen on starting off with XML-based Aadhaar authentication instead of offline QR code-based verification since the industry is not ready with that offering yet,” one of the executives told ET.
Worth mentioning here that the Supreme Court in September barred private entities from using Aadhaar-linked biometrics for customer verification. Since then banks and fintech companies have been facing severe challenges in registering new clients. This has also affected their growth in the past few months.
The government is evaluating alternative eKYC methods including QR code-based authentication linked to the Aadhaar database, but full-scale implementation remains an issue.