RBI’s latest regulation will simplify the MSME lending process
Every small business wants monetary help at some point. Most Micro, Small and medium Enterprises (MSMEs) typically need some kind of financial assistance once they are moving up growth curve. Where the money comes from is entirely up to the owners and their priorities. many different companies have the opportunity to finance themselves through various borrowing instruments.
MSME loans are specifically designed to meet requirements of small businesses. They are an excellent source of funding for entrepreneurs who want to avoid liquidation of control. Businesses seeking these loans would want to have faster process of getting these funds. Unlike before the process of MSME loans will be simplified and fasten with RBI allowing NBFCs and Payment System providers to apply for EKYC license.
How RBI’s latest regulation will simplify the MSME lending process?
The Reserve Bank of India recently announced that it has invited applications from Non-bank Financial Corporations (NBFCs), PSOs, payment system providers and payment system participants to obtain the Aadhaar EKYC authentication license.
As per the circular Non-bank Financial Corporations (NBFCs), payment system providers and payment system participants can now apply for Aadhaar EYC authentication license.
There are multiple stages of customer onboarding in the traditional KYC process once an individual declares their identity, the same has to be verified with reliable documents. it may take up to a week for the verification to be completed and approved, hence the process is time consuming.
Aadhaar EKYC and Video KYC is an additional mode through which users can complete the KYC for their accounts within just a few minutes.
The Aadhaar EKYC method is reasonably straightforward and OTP-based can be done in minutes using your registered phone number. the entire process much faster and streamlines lending as authentication can be done instantly.
Apart from being simple, Video-KYC is also a more cost-effective and faster option for verification. Video KYC solution reduces the cost of verification by almost 90%. The increased speed combined with accuracy could be the game-changer for on boarding customers and businesses.
Using Video KYC for the SME lending process can result in faster decision making and an improved user experience. It can also be used for other forms of lending by NBFCs such as individual retail lending.
To NBFCs and PSOs the authentication license will help in smoothing the lending process and also shorten the time frame for the disbursal of loans due to EKYC method. This new measure by the RBI will help to reach more MSME borrowers and reduce the processing time. for loan applications so customers get their credit lines faster, less processing time and credit is disbursed to the customer in contactless manner.
Types of EKYC:
- Online Aadhaar e-KYC
- Via biometrics authentication
- Via mobile OTP authentication
- Offline Aadhaar e-KYC
- OTP-based authentication method
- By scanning QR code
- Video KYC
- Online face-to face identity verification through a video call
Benefits of EKYC
- Instantaneous
- Acquiring more customers
- Reduction in fraud
- Higher customer satisfaction with smooth experience
- Paperless process
- No documentation loss
- Improved operational efficiency
- Gives edge to the organization
- Cost efficient
JISASoftech provides CryptoBind-EKYC and Video KYC solution that offers secure and completely remote identity verification complying with the guidelines of UIDAI.
JISA Softech is a cryptography-focused information technology company based in India. We offer cryptographic solutions to financial institutions, manufacturers, enterprises and government agencies. Our primary product lines have included industry-compliant Hardware Security Modules, Key Management Solutions, Tokenisation, Encryption, Aadhaar Data Vault, and Authentication solutions. All our Cryptographic solutions are sold under the brand name CryptoBind. Our innovative solutions have been adopted by businesses across the country to handle mission-critical data security and data protection needs.
To implement Aadhaar EKYC/Video KYC service contact us at:
Phone: +91-9619222553
Email: sales@jisasoftech.com
