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Draft Directions on Due Diligence of AePS Touchpoint Operators

Reserve Bank of India (RBI) has issued draft directions on due diligence of Aadhaar Enabled Payment System (AePS) touchpoint operators.

What is Aadhaar Enabled Payment System (AePS)?

  • Aadhaar Enabled Payment System (AePS) is a payment system in which transactions are enabled through Aadhaar number and biometrics / OTP authentication. 
  • AePS is operated by National Payment Corporation of India (NPCI). 
  • AePS facilitate interoperable financial transactions through the Business Correspondent (BC) / Bank Mitra of any bank, using the Aadhaar authentication. 
  • AePS enables basic banking services, viz., cash withdrawal, balance enquiry, mini statement, cash deposit, fund transfer, etc.
  • AePS plays a prominent role in enabling financial inclusion.

What is AePS Touchpoint?

AePS Touchpoint is the terminal deployed by acquirer banks to facilitate AePS transactions, using Aadhaar based biometric / OTP authentication.

Who is AePS Touchpoint Operator?

AePS Touchpoint Operator is the agent onboarded by the acquiring bank who operates the AePS touchpoint.

What is the rationale behind the draft directions?

There have been instances of frauds perpetuated through AePS due to identity theft or compromise of customer credentials. To protect bank customers from such frauds, draft directions have been issued to streamline the process of onboarding AePS touchpoint operators and on-going due diligence. 

What are the directions for onboarding and due diligence of AePS touchpoint operators?

  • The acquiring bank shall carry out due diligence of all AePS touchpoint operators onboarded by it.
  • The acquiring bank shall carry out updation of KYC in cases where an AePS touchpoint operator has not performed any financial transaction for a continuous period of 6 months, before enabling him / her to transact further.
  • NPCI and acquiring banks shall ensure that any AePS touchpoint operator is onboarded only by one acquiring bank.
  • The acquiring bank shall monitor the activities of AePS touchpoint operators on an ongoing basis and set operational parameters, in accordance with the following principles –
    • Transaction limits shall be set for AePS touchpoint operators based on their risk profile.
    • Transactions of AePS touchpoint operators shall be consistent with their location of operation and risk profile.
  • All System Participants are required to adhere to the rules and regulations, governing the operation of AePS, issued by NPCI (System Provider of AePS).
  • Banks and NPCI shall ensure compliance to the RBI directions within 3 months from the date of issue.


References

Reserve Bank of India. (2024, July 31). 'Aadhaar Enabled Payment System – Due Diligence of AePS Touchpoint Operators - DRAFT'. Retrieved from https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=4475

Reserve Bank of India. (2024, July 31). 'Aadhaar Enabled Payment System (AePS) – Due Diligence of Touchpoint Operators – Draft Directions'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=58401


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