As more people engage in online activities, many rely on mobile services for internet access. While digital connectivity is essential for growth, it’s important to ensure users are protected. On Thursday, Shri Ashwini Vaishnaw, the Minister of Communications, Railways, Electronics, and IT, announced two reforms aimed at enhancing customer protection and accelerating digital transformation. The reforms currently introduced for KYC and POS Registration are a continuation of previous reforms introduced through the Sanchar Saathi portal, which has enabled India to combat cybercrimes and financial fraud effectively, according to the government.
KYC Reforms
The first reform focuses on enhancing Know Your Customer (KYC) procedures. KYC is a vital process for uniquely identifying customers and ensuring their traceability before granting telecom services. Strengthening the existing KYC process is seen as a key tool in safeguarding telecom service subscribers from potential frauds, thereby bolstering public confidence in the digital ecosystem.
To combat the misuse of printed Aadhaar cards, demographic details will now be mandatorily captured by scanning the QR code of the printed Aadhaar. Furthermore, mobile numbers that have been disconnected will remain unallocated to new customers for a period of 90 days.
Subscribers seeking SIM replacement must complete the entire KYC process, and there will be a 24-hour outgoing and incoming SMS facility restriction.
In addition to thumb impression and iris-based authentication in the Aadhaar E-KYC process, facial biometric authentication has also been incorporated. Moreover, the introduction of business connections will allow entities such as companies, organizations, trusts, and societies to obtain multiple mobile connections provided complete KYC of all end-users is carried out.
Activation of these SIMs will only occur after successful KYC verification of end-users and physical premises/address verification of the entity.
Point-of-Sale (POS) Registration Reforms
The second reform targets Point-of-Sale (POS) registrations. This reform mandates the mandatory registration of Franchisees, Agents, and Distributors (PoS) by Licensees, aimed at eliminating rogue PoS entities that engage in fraudulent practices such as issuing SIM cards to anti-social or anti-national elements.
The new process necessitates unequivocal verification of PoS by Licensees and mandates a written agreement between PoS and Licensees. Any PoS engaging in illegal activities will face termination and blacklisting for a duration of three years.
