Niti Aayog chief executive Amitabh Kant Tuesday pitched for increasing the limits on loans granted through one time password-based electronic know your customer (KYC) verification. Kant said the current system of using biometric Aadhaar-authentication for small ticket loans will increase already high operating expenses of digital lenders. “Currently, lending through OTP-based e-KYC is capped at Rs 60,000 whereas the loan size through online digital mode, as per market data points, is approximately around Rs 3.5 lakh,” Kant said in video address at a Bankbazar event here.
This was part of a list of suggestions Kant made for support to the digital lending ecosystem. The bureaucrat said there is a need for multiple levels of digital verifications for establishing the identity of a person. Kant also pitched for credit cards account opening using OTP-based e-KYC and OTP-based account opening. “It should enable customers to apply for the card with more ease, and find products that best suit their financial needs. This will provide both retail consumer and SME customer more easy access to credit,” he said. There is also a need to add more issuers to Digilockers which currently store Aadhaar details using customer consent, he said.
Speaking at the same event, former RBI Deputy Governor S S Mundra said there is a need to overhaul fintech regulation in such a way that there is a “leap” rather than “incremental” change. He said fintech needs to be handled separately by regulators and not inside a department.