e-KYC finally from December | The Daily Star
12:00 AM, August 09, 2019 / LAST MODIFIED: 12:06 AM, August 09, 2019

e-KYC finally from December

The central bank is set to introduce electronic Know Your Customer (e-KYC) system from December -- a move that would allow account opening without filling in any paper-based documents.

Those with e-KYC will be allowed limited scale transactions, ranging from Tk 20,000 to Tk 5 lakh, in a development that will give momentum to the country’s financial inclusion drive.

“A good number of underprivileged and unbanked people will be brought under the umbrella of formal financial services when the new system will be introduced,” said Md Anwarul Islam, general manager at the Financial Inclusion Department of the Bangladesh Bank.

The central bank has been working for nearly three years on the programme as part of its efforts to make the financial sector more vibrant, he said.

The pilot programme for e-KYC will begin from next month with 15 commercial banks and two mobile financial service (MFS) providers.

Some 1,600 accounts will be opened in different parts of the country under the programme in order to detect probable difficulties before rolling it on a full-fledged basis from December. Customers with e-KYC can settle transactions through the MFS platform and agent banking. They can also invest in savings certificates and other government securities.

Banks can also disburse a small range of SME loans to an e-KYC account holder.

The service will be completely automated and the e-KYC data will be furnished in real-time, without any manual intervention.

Digitally signed e-KYC data will be machine readable, meaning the service provider can directly store it as customer record in their database for purpose of service and audit and so on.

The regular KYC required filling up forms with 12-28 pages along with signature, photo and supporting documents.

Under e-KYC, a customer can open an account by filling up a one-page-long digital form. The photograph will be taken on the spot and the customer’s identification data will be authenticated instantly. The thumb print would serve as the digital signature.

Clients now have to spend 3-7 days to open a bank account, but with e-KYC only 5-10 minutes will be required.

An inter-agency working group -- consisting of the central bank, Bangladesh Financial Intelligence Group, Election Commission, Bangladesh Telecommunication Regulatory Commission, Access to Finance (A2i), ICT ministry and some other financial institutions -- is working on formulating the final guidelines for the e-KYC.

The central bank had earlier planned to introduce e-KYC from June but it failed to get the approval from the EC for the use of NID database on time.

The EC though gave its approval to the 15 commercial banks and the two MFS providers in May, it was too late for the June launch.

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