The Union Cabinet approved major telecom reforms last night. Apart from a relief package for telcos, it also announced major updates to the KYC process for the telecom sector. KYC (Know Your Customer) is a mandatory process by which a customer’s identity is verified. KYC is mandated for banks, financial institutions, digital payment companies and even telcos.
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The new telecom reforms allow for self-KYC, and eliminate the need for repeat KYC verifications when switching between prepaid and postpaid connections. Until now, customers have been required to submit KYC in person for new connections, and the cabinet aims to digitise the process completely.
KYC to be digitised for new mobile connections
📌Self-KYC (App based) permitted.
📌E-KYC rate revised to only One Rupee.
📌Shifting from Pre- paid to Post-paid and vice-versa will not require fresh KYC.#TelecomReforms#CabinetDecisions pic.twitter.com/3hwL5ocusG
— Ashwini Vaishnaw (@AshwiniVaishnaw) September 15, 2021
With the government announcing that KYC for all new mobile connections will be digitised, customers will not be required to submit documents in person as has been the norm thus far. Customers will be able to perform self KYC via the relevant app. Additionally, e-KYC rates are being revised to just Re 1.
Apart from this, customers shifting from prepaid to postpaid connections and vice-versa will not have to submit KYC again, eliminating the need for repeated verifications.
“We all have mobile connection and for whatever connection it is, we have filled up some forms. All these forms are deposited in the warehouses and there are 300-400 crore forms in warehouses. In Digital India, there is no need for this paperwork. So all these will be digitised and going forward, there will be no physical KYC,” said Union Minister Ashwini Vaishnaw said after the Cabinet meeting.
India’s 5G auction to take place in February 2022
Apart from this, the Minister confirmed that 5G spectrum auctions will likely take place in February 2022, with the government possibly trying for a January timeline. The Cabinet also introduced a slew of reforms for the telecom sector, which includes a four-year moratorium on payment of dues by telcos, FDI investment up to 100 percent, permission to share spectrum and the exclusion of non-telecom revenue as AGR (Annual Gross Revenue).The new reforms are expected to ensure the survival of Vi (Vodafone Idea), which was inching close to an exit in India.