Skip to main content

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


Follow at - Telegram   Instagram   LinkedIn   X   Facebook

Labels:

Comments

Post a Comment

Popular Posts

Reserve Bank of India Act, 1934 – Part-II – Section 17 to 19

The Reserve Bank of India Act, 1934 provides the statutory basis of the functioning of the Reserve Bank of India (RBI). In a series of articles, we will briefly go through the provisions of RBI Act, 1934. This is the second article in the series.  Section 17 – Business which the Bank may transact RBI shall be authorized to carry on and transact the several kinds of business hereinafter specified, namely – 17(1) – Accept deposit without interest from the Central / State Government, local authorities, banks and any other persons. 17(1A) – Accept deposit, repayable with interest, from banks or any other person under the Standing Deposit Facility Scheme, as approved by the Central Board, for the purposes of liquidity management.   Bills of Exchange (B/E) & Promissory Note (PN) Bearing 2 or more good signatures, one of which shall be of B/E & PN arising out of Maturing within 17(2)(a) Purchase, sale and rediscou...
Post a Comment
Read more

Reserve Bank of India Act, 1934 – Part-I – Preamble and Section 1 to 13

The Reserve Bank of India Act, 1934 provides the statutory basis of the functioning of the Reserve Bank of India (RBI). In a series of articles, we will briefly go through the provisions of RBI Act, 1934. This is the first article in the series. Preamble of the Act RBI to – Regulate the issue of bank notes. Keep reserves for monetary stability in India. Operate currency and credit system of the country to its advantage. The primary objective of the monetary policy is to maintain price stability while keeping in mind the objective of growth. Chapter I – Preliminary Section 1 – Short title, extent and commencement 1(1) – This Act may be called the Reserve Bank of India Act, 1934. 1(2) – The Act extends to whole of India. Chapter II - Incorporation, Capital, Management and Business Section 3 – Establishment and incorporation of Reserve Bank 3(1) – RBI to take over management of the currency from the Central Government. 3(2) – RBI to have perpetual succession, common seal, and shall by...
Post a Comment
Read more

Reserve Bank of India Act, 1934 – Part-III – Section 20 to 40

The Reserve Bank of India Act, 1934 provides the statutory basis of the functioning of the Reserve Bank of India (RBI). In a series of articles, we will briefly go through the provisions of RBI Act, 1934. This is the third article in the series.  Chapter III - Central Banking Functions Section 20 – Obligation of the Bank to transact Government business RBI shall undertake – To accept monies for account of the Central Government and to make payments up to the amount standing to the credit of its account, and to carry out its exchange, remittance and other banking operations. Management of the public debt of the Union. Section 21 – Bank to have the right to transact Government business in India The Central Government shall entrust RBI with – All its money, remittance, exchange and banking transactions in India, and shall deposit free of interest all its cash balances with RBI. The Central Government may carry on money transactions at places where RBI has no branches or agencies and m...
Post a Comment
Read more

Reserve Bank of India Act, 1934 – Part-IV – Section 42 to 45

The Reserve Bank of India Act, 1934 provides the statutory basis of the functioning of the Reserve Bank of India (RBI). In a series of articles, we will briefly go through the provisions of RBI Act, 1934. This is the fourth article in the series.  Section 42 – Cash reserves of scheduled banks to be kept with the Bank 42(1) – Every bank included in the Second Schedule shall maintain with RBI an average daily balance at a percent (notified by RBI) of its total demand and time liabilities in India. 42(1A) – RBI may direct every scheduled bank to maintain with RBI, in addition to the balance prescribed under Section 42(1), an additional average daily balance at a rate (specified by RBI). 42(1C) – RBI may specify any transaction or class of transactions to be regarded as liability in India of a scheduled bank. If any question arises as to whether any transaction or class of transactions shall be regarded as liability in India of a schedule bank, the decision of RBI thereon shall be fina...
Post a Comment
Read more

Reserve Bank of India Act, 1934 – Part-V – Section 45B to 45JA

The Reserve Bank of India Act, 1934 provides the statutory basis of the functioning of the Reserve Bank of India (RBI). In a series of articles, we will briefly go through the provisions of RBI Act, 1934. This is the fifth article in the series.  Chapter IIIA - Collection and Furnishing of Credit Information Section 45B – Power of Bank to collect credit information RBI may collect credit information from banking companies and furnish it to any banking company in accordance with section 45D. Section 45C – Power to call for returns containing credit information RBI may direct any banking company to submit statements relating to credit information. Section 45D – Procedure for furnishing credit information to banking companies A banking company may apply to RBI to provide credit information. RBI shall furnish the requested credit information without disclosing the names of the banking companies which have submitted the information. RBI may levy fees of up to Rs.25 for furnishing credit...
Post a Comment
Read more