FIU allows FIs to verify KYC online
Financial Institutions (FIs) can now verify their KYC (Know Your Customer) details electronically when customers open accounts online, similar to the CDS (Central Depository System) authenticating identities of persons opening accounts online.
This was facilitated by the Central Bank’s Financial Intelligence Unit (FIU) last week by issuing ‘guidelines for non-face-to-face customer identification and verification using electronic interface provided by the Department for Registration of Persons (DRP), No. 3 of 2020’.
This initiative started when, as part of going digital, the Colombo Stock Exchange (CSE) and the Securities and Exchange Commission (SEC) last month inked an agreement with the DRP to digitally verify details of account holders’ National ID (Identity Card) number with their consent. “The feature of obtaining consent is also built into the CSE App,” the SEC in a statement said.
“These guidelines are issued to Financial Institutions (FIs) to facilitate verification of identity (verification against the original document) when on boarding non face-to-face individual customers (natural persons) using electronic interface provided by the DRP,” the FIU said. It said they will come into force with immediate effect and shall be read together with the FTRA(Financial Transactions Reporting Act) and FIs’ (Customer Due Diligence) Rules, No. 01 of 2016 (CDD Rules) as amended from time to time. FIs may use electronic interface published by the DRP to obtain information to independently validate the customer’s claimed identity. It provided for certain clauses – interface is accessed with the unique credentials assigned to the FI by the DRP and is accessed strictly in accordance with its terms of use and returns to the FI a record that uniquely matches the claimed identity information provided by the customer in a form suitable for verification of customer identity claims and that includes an image of the person to which the identity has been assigned that is suitable for the purpose of associating the record with the claimed identity of the customer.