The deadline for implementing the masking of Know Your Customer (KYC) to Prevent CKYC Data Fraud details in the Central KYC (CKYC) database has been extended to January 20, 2024.
“The Central KYC Customer Records Registry (CKYCR) is trying to improve data security and privacy of customers in two ways – by masking the KYC Identifiers and by preventing any intermediaries from accessing the customer’s KYC details,” says Wriju Ray.
The Know Your Customer (KYC) process is not just about identity verification; it’s a critical tool for combating money laundering and financial fraud. KYC guidelines were first introduced globally by the Financial Action Task Force (FATF) in 1989 to ensure transparency in financial transactions and protect against illicit activities.
To safeguard the integrity of KYC data and prevent its misuse, the government has introduced several measures aimed at enhancing the security of information stored within the Central Know Your Customer (CKYC) system. Two significant steps include masking KYC identifier details (such as PAN, Aadhaar, voter ID, and driving license) and implementing authorized access through unique IP addresses.
Previously, intermediaries could view and search all customer details. However, this practice is now being phased out with the mandatory masking of KYC identifiers as per the government’s directive.
Deadline Extension Identifier Masking to Prevent CKYC Data Fraud
Responding to concerns raised by banks, financial institutions, and other Regulated Entities (REs) regarding the swift implementation of these measures, the government has extended the deadline.
“In view of requests received from various Reporting Entities, it has been decided to defer the date of go live for masking of KYC Identifier from December 16, 2024, after 08:00 PM to January 20, 2025, after 8:00 PM,” as per an official communique from Central KYC Records Registry dated December 16, 2024.
Prevent CKYC Data Fraud – How Masking Protects Privacy
The updated system, set to go live on January 20, 2024, will only display the last four digits of KYC identifier documents such as Aadhaar, PAN, voter ID, and driving license, with the remaining details masked.
“The Central KYC Customer Records Registry (CKYCR) is trying to improve data security and privacy of customers in two ways – by masking the KYC Identifiers and by preventing any intermediaries from accessing the customer’s KYC details. CKYCR will now mask the KYC identifiers in its search results. By doing this, CKYCR aims to stop any unscrupulous downloading of identity data stored in the registry, by whoever has access to these KYC identifiers,” says Wriju Ray, Chief Business Officer, IDfy.
Implementation Details
As outlined in an official communique dated October 17, 2024, the Central KYC Records Registry explained the mechanics of the new process:
“To enhance data security, the KYC Identifier shall now only be available to registered reporting entities (REs) when the KYC record is successfully downloaded from CKYCRR using an authentication factor. In the KYC search response and confirmed match responses received during the new KYC record generation (KYC Upload) process, the KYC identifier shall be masked, and a CKYC reference ID that is unique to each KYC identifier shall be provided. REs shall be able to download KYC records using either the KYC identifier or CKYC reference ID.”
This step towards masking KYC identifiers marks a significant advancement in protecting the privacy of customer data while ensuring secure access for authorized entities.
Disclaimer
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