Skip to main content

Due Diligence of AePS Touchpoint Operators

Reserve Bank of India (RBI) has issued 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 providing financial services such as cash withdrawal, cash deposit, fund transfer, and non-financial services such as mini statement and balance enquiry, etc.

AePS is a payment system operated by National Payment Corporation of India (NPCI) that facilitates interoperable transactions using Aadhaar enabled authentication. 

What is AePS touchpoint?

AePS touchpoint is the terminal deployed by acquirer banks to facilitate AePS transactions, which shall include both mobile and fixed points.

Who is AePS Touchpoint Operator (ATO)?

AePS Touchpoint Operator (ATO) is the individual onboarded by the acquiring bank who operates the AePS touchpoint.

What is the rationale behind the directions?

There have been reports of frauds perpetuated through AePS due to identity theft or compromise of customer credentials. To protect bank customers from such frauds, the directions have been issued streamlining the process for onboarding of AePS touchpoint operators and strengthening fraud risk management. 

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

  • The acquiring bank shall carry out due diligence of all ATOs before onboarding them. 
  • The acquiring bank shall also carry out periodic updation of KYC of ATOs.
  • In cases where an ATO has remained inactive, i.e. has not performed any financial / non-financial transaction for a customer for a continuous period of 3 months, acquiring bank shall carry out KYC of ATO before enabling him / her to transact further.
  • The acquiring bank shall monitor the activities of ATOs through their transaction monitoring systems on an ongoing basis and set operational parameters, based on business risk profile of the ATOs. 
  • Aspects such as location and type of the ATO, volume and velocity of transactions, etc. shall form part of bank’s fraud risk management framework.
  • The operational parameters regarding ATOs shall be reviewed on a periodic basis, reflecting emerging fraud trends.
  • The acquiring bank shall put in place adequate system level controls to ensure that any technological integrations like APIs are used only for enabling AePS operations.

From when shall the directions be applicable?

The directions shall come into effect from January 01, 2026.


References

Reserve Bank of India. (2025, June 27). 'Aadhaar Enabled Payment System – Due Diligence of AePS Touchpoint Operators'. Retrieved from https://website.rbi.org.in/web/rbi/-/notifications/aadhaar-enabled-payment-system-due-diligence-of-aeps-touchpoint-operators

Reserve Bank of India. (2025, June 27). 'RBI issues directions on Due Diligence of Aadhaar Enabled Payment System (AePS) Touchpoint Operators'. Retrieved from https://website.rbi.org.in/web/rbi/-/press-releases/rbi-issues-directions-on-due-diligence-of-aadhaar-enabled-payment-system-aeps-touchpoint-operators


Follow at - Telegram   Instagram   LinkedIn   X   Facebook

Labels:

Comments

Post a Comment

Popular Posts

Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) (Updated as on September 11, 2026)

Reserve Bank of India (RBI) has issued the directions on maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) by banks. To whom are the directions applicable? The directions are applicable to the following Regulated Entities (REs) – Commercial Banks  Small Finance Banks (SFBs) Payments Banks (PBs) Local Area Banks (LABs) Regional Rural Banks (RRBs) Primary (Urban) Co-operative Banks (UCBs) Rural Co-operative Banks – State Co-operative Banks (StCBs) District Central Co-operative Banks (DCCBs) What is CRR? Every bank shall maintain in India by way of cash reserve, a sum equivalent to such percent of its Net Demand and Time Liabilities (NDTL) in India, as the RBI in terms of Section 42(1) of the RBI Act, 1934 (for scheduled banks) and Section 18(1) of the Banking Regulation Act (BR Act), 1949 (for non-scheduled banks) [including provisions of Section 18(1) of the BR Act as applicable to co-operative banks], may specify. What is incremental CRR? In terms of Secti...
Post a Comment
Read more

Framework for Self-Regulatory Organisations in the FinTech Sector (Updated on September 10, 2026)

Reserve Bank of India (RBI) has released the framework for self-regulatory organisations in the FinTech sector. What are FinTechs? For the purpose of membership of an Self-Regulatory Organisations for FinTech Sector (SRO-FT), FinTechs may be defined as entities that provide technological solutions for delivery of financial products and services to businesses and consumers or encompass regulatory and supervisory compliance in partnership with traditional financial institutions or otherwise.  What is the need of Self-Regulatory Organisations for FinTech Sector? FinTechs play a pivotal role in redefining financial services by saving time, enhancing access, and lowering costs. While the FinTechs bring various innovations, the FinTech sector also raises concerns relating to customer protection, data privacy, cyber security, grievance handling, internal governance, financial system integrity, etc. A judicious balance between maximising the creative potential of FinTechs, while minimising...
Post a Comment
Read more

Policies to be formulated by NBFC-BL

Non-Banking Financial Companies (NBFCs) are required to formulate various policies for effective corporate governance and operations. This article lists out some of the important policies to be formulated by the Base Layer NBFCs (NBFC-BL). Business Model Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 dated October 19, 2023 Para 1.1 of Annex II – In view of the criticality of the nature of the business model in determining the classification of financial assets and restrictions on subsequent reclassification, NBFCs are advised to put in place Board approved policies that clearly articulate and document their business models and portfolios. Para 1.2 of Annex II – NBFCs shall frame their policy for sales out of amortised cost business model portfolios. Expected Credit Losses (ECL) Policy Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 dated October 19, 202...
Post a Comment
Read more

What is Ways and Means Advances (WMA)? (Updated as on September 25, 2026)

Reserve Bank of India (RBI) has recently announced the Ways and Means Advances (WMA) limit for the Government of India. So, what is WMA? What is Ways and Means Advances (WMA)? Ways and Means Advances (WMA) is a collateral free clean advance availed by the Central and State Governments from RBI, to tide over temporary mismatches in the receipts and payments. Section 17(5) of the Reserve Bank of India Act, 1934 empowers RBI to grant WMA to Central and State Governments, as and when required by them. What is Special WMA / Special Drawing Facility (SDF)? In addition to WMA, State Governments are also eligible for a Special Drawing Facility (SDF), which is granted against collateral of Government Securities held by the State Governments.  SDF availed by State Governments / UTs is linked to the quantum of their investments in marketable securities issued by the Government of India, including Auction Treasury Bills (ATBs).  (Updated as on June 28, 2024) Based on the recommendations m...
Post a Comment
Read more

Unique Transaction Identifier (UTI) for OTC Derivative Transactions

Reserve Bank of India (RBI) has issued directions on Unique Transaction Identifier (UTI) for over-the-counter (OTC) derivative transactions. What are the existing norms for reporting of OTC derivative transactions? At present, all transactions in OTC markets for rupee interest rate derivatives, forward contracts in Government securities, foreign currency derivatives, foreign currency interest rate derivatives, and credit derivatives are reported to the Trade Repository managed by Clearing Corporation of India Limited (CCIL-TR).  What are the directions on Unique Transaction Identifier (UTI) for OTC derivative transactions? Unique Transaction Identifier (UTI), a unique identifier assigned to an OTC derivative transaction, shall be generated / reported for all transactions in OTC derivatives market.  The directions shall be applicable to OTC derivative transactions entered into on or after January 01, 2027. UTI shall be generated in accordance with the UTI Technical Guidanc...
Post a Comment
Read more