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Decoding RBI’s Monetary Policy and its Impact: October 2024

Decoding RBI’s Monetary Policy and its Impact: October 2024

Posted on | by Signzian

Introduction

The “Mother” of all lending organizations, the World Bank, initially forecasted a “sluggish” prognosis for 2024.
It supported its forecasts with worldwide unsettling elements like the conflict in the Middle East and Ukraine, the COVID-19 pandemic’s ongoing repercussions, and the most sensitive inflation rate of all. World economists were spooked when the World Bank said that the world economy was about to see its “weakest half-decade performance in 30 years.”

Another worrying issue was news of established economies like the UK, Japan, and Germany going into recession. All central banks worldwide, including our Reserve Bank of India, got on their front foot, trying their best to build strategies to safeguard their economies.

So, if we try to comprehend the link between the recession news and our monetary policy, it has a straightforward connection: consumers’ low spending during a recession causes a slow fall in output, which in turn leads to layoffs and ultimately a reduction in their ability to invest. It has an impact on practically every industry that operates inside an ecosystem.
Any ruling government can deal with such circumstances in several ways, one such way is through its monetary policy.

What is a Monetary Policy?

Monetary policy and its interpretations even today have many guises. But the most lucid job description of the Monetary Policy is:

“Controlled method to adjust the supply of money in the ecosystem with the end game to have a control over inflation and output”.

In our country, the Reserve Bank of India (“RBI”) is vested with the power to bring about any change in the Monetary Policy. There is a Committee, which goes by the name Monetary Policy Committee (“MPC”), that meets bimonthly to closely observe the domestic demand-supply situation and make allied and apt economic decisions by changing or not changing the terms of our Monetary Policy.

Key Highlights Related to the Monetary Policy:

This month also the MPC met and here are a few grave matters they decided upon:
RBI-Policy

1. Key repo rate remains unchanged at 6.5%

Earlier this month, looking at the current global economic scenarios and with the endeavor to control the volatility, the US Federal Reserve resorted to a 50 basis point cut. Many advanced economies also followed in the footsteps of the USA. An air of anticipation was clouding around and more eyes were on India waiting for its decision on the repo rate.

Basically, the repo rate is the rate of interest at which the RBI lends money to banks. The loans that these banks offer and the fixed deposits that they accept are directly and inevitably impacted by any change in this rate.

To everyone’s relief and a little astonishment, Shaktikanta Das, the Governor of RBI, declared that the MPC with a majority of 5:1, has decided on keeping the key repo rate unchanged at 6.5%. This was the 10th consecutive meeting where the MPC opted to keep the key repo rate stagnant at 6.5%.

The effect of the announcement was visibly seen in the Indian stock market the following day.
The global financial ecosystem is exceedingly volatile. Furthermore, even though India is doing considerably better, borrowing costs for us are still rather high. This directly affects all businesses, whether they are sole proprietorships, start-ups, or large enterprises. The moment there is an increase in the borrowing cost, it slashes down the profits and savings.

So, there is no doubt that the borrowers were the happiest, as there was no foreseeable change in the interest rate of their respective loans.

2. SDF and MSF Rates:

Banks were also delighted and here is why.
The MPC decided upon keeping the Standing Deposit Facility (“SDF”) at 6.25% and the Marginal Standing Facility (“MSF”) and bank rates at 6.75%.

For more clarity, all commercial banks can borrow from the RBI under the MSF, which is an emergency overnight liquidity instrument. In contrast, SDF is a more recent mechanism that was unveiled in April 2022 and allows banks to park their excess liquid cash with the RBI without any collateral or security in exchange for interest.

So, again, a matter of relief for our lending agents.

3. Stance of the Monetary Policy changed to ‘Neutral’

Rapid decision-making will be essential if we want India to stay up with the constantly changing global landscape. The decision of the RBI to change the stance of monetary policy to ‘neutral’ from ‘withdrawal of accommodation’ was indeed commendable.
The alteration to the neutral stance will provide enough room for the MPC to make adjustments to the monetary policy as and when needed.

The Report clearly stated that the decisions about the repo rate, MSF, SDF and neutral stance are all taken keeping in mind the dual objectives:

1.achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2 %;

2.Continued support for economic growth.

Other impactful insights by the Governor:

Current situation of the agriculture, consumer, and infrastructure industries:

India is an agrarian nation, as it supports the livelihood of 42.3% of Indians, and contributes close to 18.2% to our GDP. Monsoons every year are the sole factor setting the tone of our output and consumption from these industries.

This year we must be really grateful for Lord Indra’s blessings.

Normal monsoons were a huge relief for the agricultural and allied industries. Despite this, the RBI’s report stated that food prices might see an upturn for a while, but a positive downside will be visible towards the fourth quarter of FY 2024-25. The reversal will be possible owing to better Kharif arrivals and rising prospects of a good rabi season.

Additionally, a sufficient buffer supply of cereals is kept at the reservoirs to ensure food security in the country. This is encouraging because it will contribute to the food price deflation in the upcoming quarter.

The consumer industry is all smiles as well. The consumer-centric industry has gained confidence due to a notable increase in consumer spending for the upcoming holiday season.

Infrastructure is the backbone of any economy and our infrastructure industry is the talk of the town. Massive development projects have attracted the attention of elite international players, bringing in good investments even from abroad.

Looking within, despite a dip in profitability, the healthy balance sheets of the commercial banks, corporate houses, and the public sectors are a sign that the stupendous momentum of the infrastructure industry in India is here to stay.

Das then came to the end game and spoke about our GDP. Private consumption and investment activities have remained stable, leading to a real GDP growth of 6.7% in the first quarter of FY 2024-25. Considering both macro and microeconomic variables, the GDP growth forecasts for FY 2024–2025 are as follows:

rbidocs

Both domestic and foreign investors and agencies are pleased with these figures.

Climate Risk Information System:

However, it is impossible to overlook the worries brought on by the rise in metal prices worldwide, the increased tensions between Asian nations, the financial market’s extreme volatility, unpredictably bad weather, and other things.

As part of his announcement, Das discussed climate change and noted that it has a big impact on all ecosystems, including the financial environment.

As a first step in this direction, he declared that RBI will create a ‘Reserve Bank Climate Risk Information System (RB-CRIS)’. It is believed that this system will act as a repository for all climate-related data.

Das harped on this matter further by stating: “It is crucial for regulated entities to undertake climate risk assessments for ensuring the stability of their balance sheets and that of the financial system. Such an assessment requires, among other things, high-quality data relating to local climate scenarios, climate forecasts, and emissions.”

Aam Admi and Monetary Policy:

Lastly, our Governor did have the final touch for the Aam Admi. The per transaction limit for UPI123PAY, a platform available for feature phone users, was doubled to Rs. 10,000. Even the UPILite wallet limit is increased to Rs. 5,000 and the per-transaction limit from ₹500 to ₹1,000.

These measures will boost low-value digital transactions undertaken by Aam Admi through their feature phones.

Conclusion:

Our world is moving through a wave of rapid and extreme changes where on one side AI is becoming an inseparable part of our home and work lives and on the other side climate change is forcing us to rethink our set ways—all these and many other factors shall decide the way forward for our Monetary Policy.

Until the next meeting of our MPS, let us enjoy the stagnant repo rate of 6.5% and all the benefits it brings, shall we?

For more insights, read at:

1. https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=58850

2.https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=58851

About Signzy

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Our powerful tools and APIs deliver seamless digital onboarding, identity verification, and monitoring solutions.

With just a few clicks, you can integrate with any workflow using simple widgets—perfect for streamlining KYC, KYB, AML, fraud checks, bank account verification, and age verification for your business.

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Signzy at the Global Fintech Fest 2024

Signzy at the Global Fintech Fest 2024 – Key Highlights

Posted on | by Signzian

Key Highlights:

  • The Indian fintech space has seen meteoric growth in recent years with the industry having received $31 billion in investments in just the last decade.
  • Owing to this monetary support, the startups in the fintech industry experienced 500% growth in the same period.
  • Democratizing finance has been the name of the game with affordable mobiles and data. Zero-balance bank accounts have also led to the increased acceptance of these fintech players’ services.

India recently hosted the fifth Global Fintech Fest from 28th-30th August at the Jio World Convention Centre, Mumbai. The event had an attendance of around 800 speakers which included Narendra Modi, the Prime Minister of India, various policymakers, regulators, industry leaders, and other incumbents.

Signzy was also present at this event and we had the opportunity to communicate with the Prime Minister of India, Narendra Modi, about our collaboration with the National Payments Corporation of India (NPCI) and the Ease of Doing Business (EoDB) agency.

Let’s take a look at everything that went down at GFF 2024.

About the Global Fintech Fest 2024

The Global Fintech Fest (GFF) was started in 2020. This was the fifth edition of the event and the theme was “Blueprint for the Next Decade of Finance: Responsible AI | Inclusive | Resilient”. The event was attended by significant figures like the Prime Minister of India, Narendra Modi, the Governor of the Reserve Bank of India, Shaktikanta Das, the Parliamentary State Secretary of the German Federal Ministry of Finance, Dr. Florian Toncar, and more.

The conference aimed to lay down the plan of action for the future of the Indian fintech domain. As India thrives in the age of digitization, the Indian Prime Minister mentioned how policy changes like the removal of the Angel Tax helped the fintech sector. He also stated the need for additional regulatory measures to reduce the instances of cyber and financial crimes in the country.

The next GFF is scheduled to be held from 7th-9th October 2025.

India: The Next Fintech Frontier

The Indian economy is massively potent in its growth prospects, especially in the Fintech Industry. The availability of affordable mobile phones and data, along with the growth and acceptance of zero-balance accounts among the citizens has played an important role in expediting the country’s financial journey.

Here are a few of the feathers that the Indian fintech industry added to its hat in the last decade:

  • Indian broadband users have gone up from 60 million to 940 million.
  • Over 530 million people – equivalent to the population of the European Union have opened Jan Dhan Bank accounts. Out of these, more than 290 million bank accounts were opened by women. The Jan Dhan accounts are zero-balance accounts that aim to increase the banked population of the country.
  • The increase in the number of internet users in the country, along with the ease of access to the internet has led to India becoming the hub for more than half of the world’s real-time digital transactions.
  • More than $31 billion have been invested in the Indian fintech sector. This has led to fintech startups growing by 500%.
  • The Pradhan Mantri MUDRA Yojana: a business loan initiative by the Indian government, has disbursed loans of over Rs. 27 billion.

As you can see, the Indian fintech space is already making significant moves and it’s only getting started. Signzy sees the potential that the country has and wants to become a part of its growth trajectory. This is why, the GGF 2024 presented a perfect opportunity for us to cement a collaborative effort with the Indian government to help them on their upcoming journey.

Team Signzy in conversation with Prime Minister Narendra Modi
Team Signzy in conversation with Prime Minister Narendra Modi

Signzy x India: Moving Fintech Ahead

With India turning into a blooming economy, Signzy recognized an opportunity to grow with the Indian fintech industry. Here is a list of projects that Signzy has under works in collaboration with the National Payments Corporation of India (NPCI), and the Ease of Doing Business (EoDB) agency:

  • Signzy is collaborating with NPCI to create a unified onboarding process for Rupay Credit Cards.
  • Improving the state payment handling in rural India in collaboration with NPCI.
  • Collaborating with the Ease of Doing Business (EoDB) agency to aid in the implementation of the Digital Innovations Interventions for Sustainable Healthtech Action (DIISHA) program.

The DIISHA program aims to engage AI technology to help Accredited Social Health Activist (ASHA) workers. Collaborating with Signzy, DIISHA aims to aid ASHA workers in the following ways:

  • Create authentic records
  • Performing Liveness Checks
  • Validating the Bank Accounts of the ASHA workers
  • Creating on-the-spot Ayushman Bharat Health Accounts (ABHA)

Conclusion

India, despite being a nascent economy, is making significant strides in the fintech domain. This paints a pretty picture of possibilities. Signzy believes in this potential and is taking steps to help India achieve its Fintech dreams.

Frequently Asked Questions

1.What is the Global Fintech Fest?

The Global Fintech Fest is one of the biggest fintech conferences in India, which is hosted annually by the Payments Council of India (PCI), the National Payments Corporation of India (NPCI), and the Fintech Convergence Council (FCC).

2.Where is GFF in Mumbai?

The Global Fintech Fest is held in Mumbai at the Jio World Convention Centre.

3.What is the meaning of fintech?

The word Fintech is a combination of the words finance and tech. Fintech refers to any platform, whether in the form of an app or a website, that acts as an interface between a financial institution and its customers.

Aadhar Verification API | Making Onboarding easy and safe

Aadhar Verification API | Making Onboarding easy and safe

Posted on | by Signzian

Aadhaar Card number is used as confirmation of identity and address in India. It is a 12-digit unique identity number issued by the Unique identity Authority of India (UIDAI).

The number is unique since it is connected to the individual’s biometrics and cannot be replicated.

Organisations may track fraudulent and ghost identities and take preventive measures as early as the onboarding stage by verifying their Aadhaar cards. What’s better than Aadhaar number verification is quick online Aadhaar verification via the aadhaar card verification API.

What is aadhar authentication?

Aadhaar authentication is the process of verifying an individual’s unique identification by using their Aadhaar number. It allows service providers to check individuals’ identities before providing them with services or benefits

When an individual gives their Aadhaar number for authentication, the requesting organisation sends the Aadhaar number and the individual’s biometric or demographic information to the UIDAI for verification.

The UIDAI checks the given data to the information held in its database. If the details match, the authentication procedure is successful, and the requesting organisation receives a Yes/No response indicating if the identity is valid.

Aadhaar-based authentication allows organisations to eliminate duplication or fraudulent identities, ensuring that only authentic persons are associated with critical business processes.

Aadhaar-based authentication other advantages are mentioned below.

Signzy’s Aadhaar Verification API Advantages

Ease in access

Signzy’s Aadhaar verification API is optimized for seamless user experience.

Regulatory compliance

Signzy’s Aadhaar card API verifies the information submitted to the Aadhaar department, ensuring it is legitimate and accurate.

Prevents identity fraud

Aadhar kyc API detects fraudsters who use phony aadhaar cards or credentials.

Real-time Verification

Data is retrieved and confirmed in only a few seconds, saving you time and money.

Instant onboarding

In about 2-5 minutes, you can onboard clients, third parties, and employees safely using Signzy’s

How Does Signzy’s aadhaar verification API Work?

Our aadhar verification API is very easy to use. Here are the steps you need to follow:

First, you have to upload the ZIP or XML file of Aadhar downloaded from the UIDAI website.

The information is then retrieved by a real-time database check or an OCR run.

Your instant Aadhar Verification is completed and ready for response.

Aadhar verification has some challenges. Let’s discuss them and their solutions.

Challenges with Aadhaar card verification

If the aadhaar card is submitted offline, the organisation can check the duplicate against the applicant’s original aadhar card. In this instance, there would be no problem determining the card’s legitimacy. However, problems arise when a soft copy of the aadhaar card is submitted to the organisation and needs to be authenticated using API to verify aadhar number.

Furthermore, if the business transforms the physical copy of the Aadhaar card to a digital version before conducting verification, the verification department may experience difficulties. These obstacles can arise from the following common issues –

Distorted images

If the scanned or digitized image is cloudy or blurry, the right data cannot be recovered. Furthermore, it calls into doubt the data’s legitimacy and may provide unreliable information.

Cyber fraud is becoming more common as the internet has advanced. Cybercriminals can misuse, morph, and use other people’s data to commit cyber fraud. There is a substantial risk of cyber fraud with digital aadhaar cards, and the aadhaar card’s legitimacy is called into question.

Physical verification is inefficient

Physical verification is one method for eliminating the potential of online fraud. However, physical verification is not practicable in today’s digital age, and it also needs the business to invest valuable man-hours, which is useless and increases costs.

The firm thus needs a digital method to validate its applicants’ Aadhaar cards, which is where Signzy comes in. Signzy provides enterprises with a digital API that allows them to validate Aadhaar cards in real time without the risk of errors or fraud.

FAQs

1.Who Can Use Aadhaar Verification APIs?

Aadhaar Verification APIs can be used by a variety of businesses and sectors to streamline their identity verification operations.

Banks and financial institutions use aadhaar authentication APIs to verify customers’ identities while opening accounts, applying for loans, and doing other financial operations.

Telecom businesses can use aadhaar verification APIs to authenticate clients while issuing new SIM cards or mobile connections.

E-commerce platforms can use aadhaar card APIs to verify the identities of suppliers and purchasers, hence increasing confidence and security in online transactions.

2.What are the different types of Aadhar card verification?

There are two type of aadhar APIs: Verification API and Validation API.

The Aadhar validation API is a simple API for verifying the authenticity of aadhar cards. The Aadhar Verification API is more advanced, as it can validate each data point on the aadhar card.

3.How does Aadhar Verification API ensure security?

Aadhar verification API ensures security to a great extent as it verifies an individual’s data with the UIDAI database.

4.Does the Aadhaar Verification API have any limitations?

To protect the security and privacy of people’s personal information, there are certain limitations on using the Aadhaar Verification API. Companies should abide by the UIDAI’s guidelines and use the API only for the authorized uses permitted by law.

Key Facts Statements (KFS) For Loans and Advances

Posted on | by Signzian

Reserve Bank of India (RBI), on 15th April 2024, announced the new guidelines for Key facts statement (KFS) for retail and MSME terms loans and advances, containing essential information such as the all-inclusive APR and recovery and grievance redress mechanisms.

These guidelines are mandatory to ensure enhanced transparency in lending and enable customers to make informed decisions, thereby empowering borrowers to make informed financial decisions.

To whom are these changes intended?

    • All Commercial Banks
      • Local Area Banks,
      • Small Finance Banks, 
      • Regional Rural Banks, 
      • excluding Payments Banks
    • All Co-operative Banks
    • All NBFCs
      • Housing Finance Companies (HFC)
      • Microfinance institutions (MFI)

     

Here’s a quick checklist for your perusal

I am a bank and we use KFS for credit cards as well. Do these guidelines apply to credit card products as well?

No – these changes are only for “Retail and MSME term loans.” However, with implied regulations and the changing lending landscape, we prefer to look for new guidelines from the RBI.

“Credit card products and corporate loans” are not included in the recent KFS guidelines shared by RBI.

2. As announced in the Statement on Developmental and Regulatory Policies dated February 8, 2024, it has been decided to harmonize the instructions on the subject. This is being done in order to enhance transparency and reduce information asymmetry on financial products being offered by different regulated entities, thereby empowering borrowers for making an informed financial decision. The harmonised instructions shall be applicable in cases of all retail and MSME term loan products extended by all regulated entities (REs)

What are the changes mandated by RBI?

1. “The new KFS statement should be in a standardized format with an added APR and Amortization sheet.”

4. REs shall provide a KFS to all prospective borrowers to help them take an informed view before executing the loan contract, as per the standardised format given in the Annex A. The KFS shall be written in a language understood by such borrowers. Contents of KFS shall be explained to the borrower and an acknowledgement shall be obtained that he/she has understood the same.
6. The KFS shall also include a computation sheet of annual percentage rate (APR), and the amortisation schedule of the loan over the loan tenor. APR will include all charges which are levied by the RE. Illustrative examples of calculation of APR and disclosure of repayment schedule for a hypothetical loan are given in Annex B and C respectively.

As per Annex A, provided by RBI


The KFS annex A has ensured transparency by providing the exact format in 2 parts:

Part 1: Interest rate and fees/charges

  • Loan proposal/account No.
  • Type of Loan
  • Sanctioned Loan amount (in Rupees)
  • Disbursal schedule (including stages and related clauses if not disbursed 100% upfront)
  • Loan term (specified in years, months, or days)
  • Installment details (type, number, amount of EPIs, and commencement of repayment)
  • Interest rate (percentage and type: fixed, floating, or hybrid)some text
  • Additional floating rate information: Reference Benchmark, Benchmark rate, Spread, Final rate, Reset periodicity, Impact of benchmark change on EPI, and number of EPIs
  • Fees/Charges (payable to the RE, payable to a third party through RE, including specifics like processing fees, and insurance charges)
  • Annual Percentage Rate (APR) (expressed as a percentage)
  • Details of Contingent Charges (penal, foreclosure, switching charges, etc.)

Part 2: Other qualitative information

  • Clause of Loan agreement relating to engagement of recovery agents
  • Clause detailing grievance redressal mechanism
  • Contact details of the nodal grievance redressal officer (phone number and email)
  • Information on potential transfer of the loan to other REs or its securitization
  • Details related to collaborative lending arrangements: Names and proportions of funding by the originating and partner REs, blended interest rate
  • Specific disclosures for digital loans: some text
    • Cooling off/look-up period
    • Details of the LSP acting as a recovery agent

KFS annex B has illustrated the computation of ARP for retail and MSME term loans:

KSF annex C has illustrated the repayment schedule under equated periodic installment (EPI) for the hypothetical loan.

2. “The KFS should be written in standard language for borrowers to understand.

4. REs shall provide a KFS to all prospective borrowers to help them take an informed view before executing the loan contract, as per the standardised format given in the Annex A. The KFS shall be written in a language understood by such borrowers. Contents of KFS shall be explained to the borrower and an acknowledgement shall be obtained that he/she has understood the same.

It has been mandated by RBI that the content of KFS should be explained to the borrower and the KFS shared with the borrower should be in the language understood by the borrower.  

Since most of the borrowers don’t speak only English or Hindi, as a best practice, the KFS and loan agreement should be in a language understood by the borrower and the loan execution journey for eSign should also be in the same language.

3. Lenders should help borrowers understand KFS before loan execution.

4. REs shall provide a KFS to all prospective borrowers to help them take an informed view before executing the loan contract, as per the standardised format given in the Annex A. The KFS shall be written in a language understood by such borrowers. Contents of KFS shall be explained to the borrower and an acknowledgement shall be obtained that he/she has understood the same.

It has been mandated by RBI to allow borrowers to review the entire KFS before signing.

In physical flow, the KFS should be shown and reviewed by the borrower.

In digital flow, during the loan execution journey, the KFS shall be reviewed by the borrower who could accept or reject it.

4. Loans with tenure >7 days -> The KFS validity will be 3 working days.
Loans with tenure <7 days -> The KFS validity will be 1 working day.

Further, the KFS shall be provided with a unique proposal number and shall have a validity period of at least three working days for loans having tenor of seven days or more, and a validity period of one working day for loans having tenor of less than seven days.1

Explanation

Validity period refers to the period available to the borrower, after being provided the KFS by the RE, to agree to the terms of the loan. The RE shall be bound by the terms of the loan indicated in the KFS, if agreed to by the borrower during the validity period.

Simply put,

For loan tenure => 7 days or more, the lender has to provide at least 3 or more working days for the borrower to review and sign the KFS

For loan tenure <= 7 days, the lender has to provide at least 1 working day for the borrower to review and sign the KFS

Note: The validity period will start from the day KFS is provided to the borrower. It is a minimum timeframe in which the borrower is entitled to either accept or reject the KFS.

There are two approaches by which lenders can share the KFS document with the borrower:

  1. Approach 1: It suggests that the KFS shall be sent to the borrower first – To review, acknowledge, and eSigned. Afterward, the loan agreement shall be sent to the borrower – To review, acknowledge, and eSigned.The KFS and loan agreement will not be part of the same loan kit.Note: The validity period as stated above is only for KFS. The lenders can choose loan agreement expiry as per their internal regulations.
  2. Approach 2: It suggests that the KFS and loan agreement shall be sent to the borrower as part of the same loan kit – To review, acknowledge, and eSigned.


Note: The validity period as stated above is now for the entire contract. 

Note: Lenders can also upload scanned copies of KFS and loan agreements and share them with borrowers for signing.

5. The borrower should consent and acknowledge the agreement before signing.

4. REs shall provide a KFS to all prospective borrowers to help them take an informed view before executing the loan contract, as per the standardised format given in the Annex A. The KFS shall be written in a language understood by such borrowers. Contents of KFS shall be explained to the borrower and an acknowledgement shall be obtained that he/she has understood the same.

In the digital KFS flow, there are multiple ways you can get consent and acknowledgment:

In the digital KFS flow, there are multiple ways you can get consent and acknowledgment:

  • Aadhaar eSign (OTP, FaceAuth, Fingerprint, Iris)
  • Smart eSign (Draw signature, upload, select auto-generated signature)
  • Clickwrap (Based on your legal/compliance need)

All these methods are valid by IT Act, 2000 for collecting eSigns from the borrower.

For high-stakes loans where legal enforceability is crucial, you can often prefer robust authentication methods such as Aadhaar eSign.

For lower-risk loans where regulatory compliance is the primary concern, simpler electronic verification methods such as Smart eSign or clickwrap can be opted for.

6. Without the borrower’s explicit consent, lenders cannot charge any fees not mentioned in KFS, ensuring fair practice.

7. Charges recovered from the borrowers by the REs on behalf of third-party service providers on actual basis, such as insurance charges, legal charges etc., shall also form part of the APR and shall be disclosed separately. In all cases wherever the RE is involved in recovering such charges, the receipts and related documents shall be provided to the borrower for each payment, within a reasonable time.

8. Any fees, charges, etc. which are not mentioned in the KFS, cannot be charged by the REs to the borrower at any stage during the term of the loan, without explicit consent of the borrower.

Simply put, if you wish to levy any additional charges that are not mentioned in the KFS document, you will need to have the explicit consent of the borrower.

In all cases wherever the RE is involved in recovering such charges, the receipts and related documents shall be provided to the borrower for each payment, within a reasonable time.

7. Updating loan terms requires consent from both the lender and the borrower.

When modifying loan agreements, it’s essential to follow proper contractual procedures, the process involves creating a new KFS and loan agreement that accurately reflects the proposed changes.

These documents should be presented to the borrower for review and approval.

The borrower’s explicit consent is crucial in this process. It’s important to note that lenders cannot force borrowers to accept new terms.

The borrower has the right to decline any proposed modifications to the original agreement.

In scenarios where a borrower refuses the new terms, lenders must respect this decision. It’s not permissible for the lending institution to unilaterally terminate the loan based solely on the borrower’s rejection of proposed changes.

The original terms of the loan agreement should remain in effect unless both parties agree to modifications.

How to comply with KFS’s new regulations using Contract360

  1. Template Engine: You can easily create pre-build templates where data can be pre-populated as per borrowers’ details and can be easily sent to borrowers for eSign.
  2. Setting up the KFS flow – You can easily set up both of the flows where KFS can be sent separately or together as a KFS loan kit, for borrower to eSign. 
  3. Selecting borrower-preferred language – You can easily build a template and eSigning journey in borrower-preferred language from 13+ local language support for a personalized borrower experience.
  4. KFS Consent and acknowledgment – Borrower can easily review the KFS, simply accept the KFS by acknowledging via eSign, or reject if any discrepancies are found. 
  5. Validity period – You can easily set custom expiry links for borrowers to eSign the agreement.

Using Contract360, you can easily comply with all new KFS regulations within a week.

Contact us to schedule an expert call on how Contract360 can help you comply!

FAQ

Q. What would happen if I’m unable to comply with new KFS regulations?

A. RBI rolled out strict guidelines with a deadline of 1st October 2024.

Incase of non-compliance, RBI can charge a hefty fine or penalty. The new guidelines are mandatory for Banks, Co-op banks, SFB, NBCF, HFC, and MFI.

Using the Contract360, you can seamlessly comply with new KFS rule and be complaint in 1 week.

Get on an expert call

Q. KFS needs to be in a language understood by the borrower. I don’t have the bandwidth to change the language fluency for the borrower.

A. Contract360 provides support to convert your existing KFS into 13+ local languages. With Contract360, you can select the borrower-preferred language to complete the loan execution journey.

With dedicated ESP like eMudhra, you can easily change the consent text in 10+ different vernacular languages as well, providing an end-to-end personalized experience. 

Q. What loans are covered in new KFS regulations that I need to comply with?

A. New KFS regulations suggest all loans including:

  1. Retail Lending by all REs 
  2. Term loans to MSMEs by all REs
  3. Loans by SCBs to individual borrowers 
  4. Digital lending by any regulated entity
  5. Microfinance loans whether by MFIs or other REs

Loan excludes

  1. Credit card debt
  2. Corporate loans

Q. What exactly comprises of retail loan?

A. Retail loans may include all types of loans to individuals, including the following :

  1. Vehicles/Auto loans 
  2. Educational loans
  3. Home Loans
  4. Loan against shares
  5. Loan against property
  6. Loan against fixed deposit, etc.

The retail loan does not include:

  1. Business loans
  2. Lines of credit – as the circular specifically refers to term loans
  3. Loans to corporates (other than MSMEs)
  4. Dealer financing (other than individuals)
  5. Builder Finance (other than individuals)


Q. Is it applicable to an LSP displaying loan information?

A. If LSP is acting on behalf of the lender, and the authority of the lender, what applies to the lender applies to the LSP as well. 

If LSP only has a platform that aggregates lenders and borrowers and provides a digital interface, they are not obliged to adhere to these new guidelines. However, we recommend you know about new regulations if needed to comply in the future.

Q. What are the differences between MITC and KFS?
I’m an HFC, do I need to comply with both?

A. MITC is Most Important Terms and Conditions and KFS is Key Facts Statements. The format of KFS is more focused on interest rates and other charges as well as a few qualitative terms of the loan, whereas MITC provides several other relevant details.

However, there are no new rules for MITC but lenders should prepare MITC as well as KFS in case of home loans.

Q. I am an LSP or digital lending platform. Will I be issuing the new KFS?

A. KFS should be issued by the lender and not the LSP/DL platform.

KFS needs to be reviewed and acknowledged by the borrower by a link sent via verified email ID/SMS/ Whatsapp

In the case of co-lending KFS is issued on behalf of joint lenders 

Penny Drop Verification: Did you receive ₹1 from Signzy in your bank account?

Posted on | by Signzian

Someone transferred Rs 1 to my account through IMPS. Is someone trying to steal the money?
I got a message saying Re. 1 was transferred to my bank account through IMPS. I did not initiate any such transaction. What is it?

What possible fraud could be if someone credited only Re 1 to my bank account through IMPS?
Somebody has deposited an amount in my account through IMPS. My bank statement needs to show his name. Is it possible to know who has sent this amount?

How can I find out who credited money to my bank account through IMPS?
Why have I gotten a message from SBI that ₹1 has been credited to your account through IMPS, even though I have not done any transactions?

You might be trying to figure out why I’ve received ₹1 in my bank account when I haven’t initiated any transaction.

The answer is simple.
Penny Drop verification!

What is Penny Drop Verification?

Penny Drop Verification is a type of method under instant bank account verification that financial institutions use to validate and ownership of a bank account. In this process, a small amount of money is deposited into the specified bank account. The account holder must then confirm the exact amount of this micro-deposit, proving they have access to and control over the account. This helps ensure that the account holder details provided are accurate and that the account is active.

It is a method in bank account verification to diligently determine bank details’ authenticity, validity, and account ownership by entering the bank account number and IFSC code.

Why did you receive ₹1 from Signzy in my bank account?

Let’s understand from an example.

Raj is working in a corporate firm seeking a loan from a leading private bank for his personal use. The bank has already done its KYC process and Raj is waiting for approval from the bank. Meanwhile, the bank as a part of the compliance process, needs to validate the details of his provided bank account to perform bank account verification for account ownership and credibility for the loan payout.

The bank uses this method to verify the bank account details instantly. In this process, the bank transfers a micro-deposit of ₹1 to the bank account to validate the beneficiary name, mobile number, and account status for a loan payout.

It is a type of bank account verification that instantly validates the account ownership and credibility of the bank account details.

The big question: But I haven’t taken a loan from any bank.

Correct. Bank account verification is done by a firm, business, or bank when they need to validate the account’s credibility and account status. There could be multiple reasons why you have received ₹1 in your bank account.

Bank account verification: The Use cases

Banks

Use Case: Customer Onboarding and Account Opening

  • Purpose: To ensure that new customers’ bank accounts are valid and belong to them.
  • Process: During the onboarding process, banks perform bank account verification to deposit a small amount into the customer’s provided account, for account ownership and validity check. 
  • Benefit: Reduces the risk of fraudulent accounts and ensures compliance with KYC (Know Your Customer) regulations and be compliant with regulatory requirements.

Payment Service Providers

Use Case: Merchant and User Account Verification

  • Purpose: Verify merchants’ and users’ bank accounts for secure transactions and payouts.
  • Process: Payment service providers use bank account verification verification to validate the bank accounts linked to their platform. This ensures that the account details provided are correct and that the account is active.
  • Benefit: Enhances the security of the payment process, reducing the risk of payment failures and fraud.

Microfinance Institutions

Use Case: Loan Disbursement

  • Purpose: To confirm the bank accounts of borrowers before disbursing loans.
  • Process: Before releasing funds, microfinance institutions perform bank account verification to ensure the accuracy of the borrower’s account details.
  • Benefit: Prevents disbursing loans to incorrect or fraudulent accounts, ensuring that funds reach the intended recipients.

Wallet Service Providers

Use Case: Linking Bank Accounts for Fund Transfers

  • Purpose: Verifying bank accounts linked to digital wallets for seamless fund transfers and payouts.
  • Process: Wallet service providers use bank account verification to ensure that the linked bank account is valid and controlled by the wallet user.
  • Benefit: Ensures secure and accurate fund transfers between the wallet and bank accounts, improving user trust and platform reliability.

Equity and Investment Firms

Use Case: Investment Account Funding and Withdrawals

  • Purpose: To verify the bank accounts of investors for funding investments and processing withdrawals.
  • Process: Investment firms use bank account verification to validate investor bank details before allowing deposits and withdrawals.
  • Benefit: Reduces the risk of errors and fraud in financial transactions, ensuring that funds are transferred to and from legitimate accounts.

Marketplaces

Use Case: Vendor and Seller Payouts

  • Purpose: To confirm the bank accounts of vendors and sellers for accurate payouts.
  • Process: Marketplaces perform bank account verification for vendors and sellers to ensure that payout information is correct.
  • Benefit: Ensures timely and accurate payouts, improving vendor and seller satisfaction and reducing administrative overhead.

Insurance Companies

Use Case: Policyholder Payouts and Premium Collection

  • Purpose: To verify the bank accounts of policyholders for processing claim payouts and collecting premiums.
  • Process: Insurance companies use bank account verification to confirm the bank details of policyholders, ensuring that transactions are conducted smoothly.
  • Benefit: Ensures that claim payouts are made to the correct accounts and that premium collections are accurately processed, reducing the risk of financial discrepancies and fraud.

Is it legal for Signzy to perform bank account verification without my knowledge?

Signzy works as a verification agency on behalf of banks, investment firms, payment service providers, etc., to ensure the details provided by beneficiaries during the onboarding process, are valid and eliminate any fraud instances of identity theft, account takeover, etc., while being 100% compliant to regulatory laws.

Signzy does not store any sensitive information about its clients. With 100% assurance, we validate bank accounts based on the client’s request and for verification purposes only. 

How to stay protected from fraudulent accounts?

Every time you receive money in your bank account, the amount is displayed in your SMS template to two decimal places. In a hurry or when you’re not focused, you can read Rs 200.00 as Rs 20,000. This is another reason con artists don’t allow you much time to respond to their schemes.

For example: Received Rs 200.00 in your Bank AC X4182 from 123456789@sbi on 29-05-24. UPI Ref: 123456789123.” This is the template of a UPI money received SMS.

Here are some suggestions to avoid falling into this kind of UPI scam:

  • Always double-check your payment requests: Before approving any UPI request, double-check who sent it and whether it is a request to pay or receive money. Be aware of sudden financial requests.
  • Verify sender information: If you receive a payment request from an unfamiliar source or for an unexpected amount, phone or message the sender to confirm their information.
  • Be wary of unwanted texts and collection requests: Scammers frequently send unsolicited messages with misleading or false claims. Do not respond to or authorize any requests without first validating the sender’s identity and the transaction’s purpose.

Key Points to Consider for Bank Account Number Verification in India

Bank account number verification is crucial for protecting individuals and businesses from fraud, ensuring compliance with all regulatory requirements for instant verification, and fostering trust within the financial ecosystem. Despite its apparent simplicity, navigating the complexities of bank account verification in India can be challenging. Here are key considerations:

Guidelines and Best Practices

  • Choosing the Right Method: Select robust verification methods such as API integration to achieve real-time accuracy and enhanced security.
  • Data Accuracy: Prioritize the accurate collection of customer information and thorough document validation to minimize discrepancies and errors.
  • Transparency and Communication: Keep customers informed about the verification process, necessary documentation, and any potential delays.
  • Security Infrastructure: Invest in strong data security measures and adhere to best practices for data protection.

Importance of Accurate Data

  • Fraud Prevention: Implementing instant verification of bank details and ensuring data accuracy reduces the risk of identity theft, financial scams, and money laundering.
  • Streamlined KYC: Accurate information facilitates the Know Your Customer (KYC) process, leading to faster onboarding and smoother transactions.
  • Reduced Financial Losses: Verified accounts result in fewer chargebacks, fraudulent transactions, and disputes.

Bank account verification: New age of account verification

Are you a business, a bank, a PSP, or an investment firm looking for a bank account verification process with account number and IFSC code or UPI handle?

Signzy provides multiple bank account verification methods to ensure account credibility and ownership as per your business requirement, onboarding, and verification process. 

Intelligent auto-routing for penny drop verification

Eliminate the risk of fraudulent accounts with AI-enabled auto-routing during penny testing and know the exact reason for verification failures such as account frozen or closed, perform bulk account verification in one go via simple Excel/CSV upload, utilize our proprietary name match score for additional authentication, and maintain a complete audit trail for transparency and compliance. 

Verify beneficiary account ownership with reverse penny drop

Authentication mechanism for proactive fraud prevention, increase accuracy for real-time account verification, and maintain a complete audit trail for transparency and compliance.

Validate any UPI handle to ensure secure transactions

Instantly verify bank accounts linked with UPI IDs, increase accuracy for real-time account verification, verify accounts on the fly for accurate onboarding and payouts, and perform bulk account verification in one go via simple Excel/CSV upload.

Verify bank details with the IFSC code

Get a weekly updated IFSC code list for instant and accurate verification of bank details, instantly know whether IMPS is enabled, and perform bulk account verification in one go via simple Excel/CSV upload to the system.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs, easily added to any workflow with simple widgets

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.
Contact us directly!

 

Banks

How Signzy Can Help Banks Combat the Rising Tide of Fraud

Posted on | by Signzian

News headlines across India blared: “Banks Recorded Rs 1 Trillion in Fraud-Related Write-Offs.” A staggering figure, it paints a concerning picture of a financial landscape riddled with deceit. While Dinesh Khara, Chairman of State Bank of India, claims the ‘loan write-off era’ is ending, the statistics tell a different story – one of evolving fraudsters and vulnerable systems.

Digging deeper into the data from Business World, we see a worrying shift: private banks now dominate fraud-related write-offs, their share skyrocketing from 12% in 2016 to 74% in 2023. Even more alarming, while the overall number of frauds has gone up, the financial involvement has decreased. This suggests smarter, more sophisticated scams slipping through the cracks.

So, where does hope lie? Enter technology, and with it, Signzy.

The Technological Shield

Traditional fraud detection methods are akin to swatting flies with a newspaper – reactive, inefficient, and ultimately futile. The need of the hour is proactive, intelligent systems that anticipate and thwart fraud before it can wreak havoc. This is where advancements in AI and machine learning take center stage.

Signzy Steps Up:

Signzy’s suite of digital trust solutions utilizes cutting-edge AI and ML algorithms to create an impregnable barrier against fraud. Here’s how:

  • Digital KYC and Onboarding: Verify customer identities in real-time with facial recognition, liveness detection, and document verification. Eliminate fake or stolen identities used for fraudulent activities.
  • Continuous Transaction Monitoring: Analyze every transaction in real-time, flagging suspicious patterns and anomalies that might indicate fraud. Say goodbye to delayed detection and hefty losses.
  • AI-powered Risk Scoring: Build dynamic risk profiles for each customer based on their behavior, transaction history, and external data sources. Proactively identify high-risk individuals and transactions before they can cause damage.
  • Automated Investigation and Alerting: Receive instant alerts for suspicious activity, allowing for swift action and minimizing potential losses. No more time lost in manual investigations.

The Future of Security in Banks

The battle against fraud is a constant evolution, and Signzy is at the forefront. With its commitment to continuous innovation and cutting-edge solutions, Signzy empowers banks to build a future of trust and security. Imagine a financial landscape where:

  • Loan approvals are instant and secure, free from the fear of fraudulent applications.
  • Transactions flow seamlessly, unhindered by the specter of hidden scams.
  • Customer trust thrives, knowing their finances are protected by an invisible yet invincible shield.

This is the future Signzy is building, brick by digital brick. Let’s join hands and create a banking ecosystem where fraud is not a headline, but a distant memory.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs, easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.
Contact us directly!

Payment Aggregators

How Signzy Empowers Payment Aggregators in a Licensed Landscape

Posted on | by Signzian

Before we start, let’s know, what are Payment Aggregators? – Payment aggregators are financial entities that facilitate processing of transactions between merchants and customers without the need for multiple direct merchant accounts.

Well, the Indian digital payments scene just got a shot in the arm!

The Reserve Bank of India (RBI) has finally granted Payment Aggregator (PA) licenses to key players like Razorpay and Cashfree, paving the way for a vibrant and regulated ecosystem. This move signifies a significant leap forward for the industry, bringing much-needed clarity and stability.

But with great power comes great responsibility. Obtaining a PA license isn’t just about a celebratory press release. It’s about meeting stringent compliance requirements and ensuring robust merchant onboarding, monitoring, and underwriting practices. This is where the real challenge lies, and this is where Signzy steps in as your trusted partner.

Understanding the Power of a Payment Aggregators License

Remember the days of uncertainty around merchant onboarding and compliance? The PA license puts those concerns to rest. It sets the gold standard for digital payment acceptance, ensuring consumer protection and fostering trust in the system. This is a game-changer for payment aggregators, opening doors to new markets and partnerships, and ultimately, fueling growth.

The Thorny Side of the Rose: Challenges in the New Landscape

While the PA license unlocks opportunities, it also presents its own set of challenges. Let’s face it, the current ecosystem faces hurdles in:

  • Merchant Onboarding: Streamlining the process while ensuring thorough KYC and AML checks.
  • Merchant Monitoring: Keeping a watchful eye on suspicious activity and preventing fraud.
  • Underwriting: Accurately assessing risk and extending credit responsibly.

These challenges can be daunting, but they don’t have to be insurmountable.

Signzy: Your Digital Shield in the Payment Aggreagators Arena

Signzy offers a comprehensive suite of solutions specifically designed to address the challenges faced by payment aggregators in the new PA landscape. We empower you with:

  • Automated Onboarding: Say goodbye to manual paperwork and embrace seamless digital verification with AI-powered KYC and AML tools.
  • Real-time Monitoring: Gain unparalleled visibility into your merchant activity with advanced fraud detection and risk management systems.
  • Data-driven Underwriting: Leverage the power of data and AI to make accurate risk assessments and extend credit with confidence.

Harmony with Regulations and Networks

Signzy’s solutions are meticulously aligned with the latest RBI regulations and payment network standards. We understand the importance of compliance and work closely with regulatory bodies and financial institutions to ensure your operations remain seamless and secure.

Conclusion

The PA license is a watershed moment for the Indian digital payments industry. It unlocks immense potential, but it also demands robust solutions to navigate the challenges. Signzy stands as your trusted partner, empowering you to thrive in this new landscape with cutting-edge technology and a commitment to compliance.

Ready to embrace the future of digital payments? Contact Signzy today and discover how we can help you navigate the PA landscape with confidence and ease. Visit www.signzy.com for more information about us. 

Banking Frauds

Top 5 Emerging Banking Frauds in 2024

Posted on | by Signzian

The Reserve Bank of India reported that in the financial year 2023, bank frauds amounted to more than 302.5 billion Indian rupees, marking a decrease from over 1.3 trillion rupees in 2021. However, the number of bank fraud cases increased to more than 13,000 in 2023, up from the previous year! 

The financial sector in 2024 stands at a pivotal point, balancing on the edge of technological innovation and the rising tide of sophisticated fraud schemes. The digital era has not only transformed the way financial services operate but also how fraud is committed. This shift demands a proactive and knowledgeable approach to safeguard against emerging threats. 

In this comprehensive exploration, we delve into the top five fraud trends anticipated in the financial sector in 2024 and outline robust strategies for their mitigation. 

Deepfake Technology in Identity Fraud

One of the most alarming developments in digital fraud is the use of deepfake technology. Deepfakes, which leverage artificial intelligence to create hyper-realistic but entirely fabricated images and videos, are increasingly being used in identity fraud. Fraudsters can now create convincing fake IDs, or even video calls to impersonate clients or officials, leading to unauthorized access to financial accounts and sensitive information.

In 2023, we witnessed a 30% increase in deepfake-related crimes, and this trend is only expected to rise in 2024. The financial sector, with its reliance on digital identity verification, is particularly vulnerable. The sophistication of these fakes makes them challenging to detect, posing a significant threat to the integrity and security of financial transactions.

Mitigation Strategies:

Combatting deepfake-related fraud requires a multi-faceted approach:

  1. Advanced Detection Technology: Implementing AI-driven verification systems that can detect anomalies and inconsistencies in digital images and videos is crucial. These systems should be trained to recognize the subtle signs of deepfake manipulation.
  2. Biometric Verification: Incorporating biometric data, like fingerprints or retina scans, adds an additional layer of security. Unlike visual representations, biometric data is much harder to replicate or forge.

Sophisticated Phishing Attacks via Artificial Intelligence

In 2024, AI-enhanced phishing attacks are becoming increasingly sophisticated. These attacks use AI to tailor messages and bait that are incredibly convincing and personalized, making them harder to distinguish from genuine communications. Such attacks can result in unauthorized access to sensitive financial data and substantial financial losses.

Mitigation Strategies:

  1. Advanced Email Filtering Solutions: Employ AI-driven email filtering tools that can detect and block sophisticated phishing attempts.
  2. Regular Security Training: Conduct frequent training for employees to recognize and report advanced phishing attempts.
  3. Multi-Factor Authentication (MFA): Implement MFA to add an extra layer of security, reducing the risk of compromised credentials.
  4. Real-Time Monitoring and Response: Establish a 24/7 monitoring system to detect and respond to phishing attacks promptly.

Cross-Border Transaction Frauds

As global financial transactions increase, so do cross-border frauds. These involve complex schemes that exploit differences in regulatory environments across countries, making detection and recovery difficult.

Mitigation Strategies:

  1. International Collaboration: Collaborate with international financial institutions and law enforcement agencies for information sharing and joint efforts in fraud prevention.
  2. Advanced Analytics: Utilize advanced analytics to monitor and analyze cross-border transactions for suspicious patterns.
  3. Customer Verification: Implement stringent customer verification processes for international transactions.
  4. Regulatory Compliance: Ensure strict adherence to international financial regulations to prevent exploitation.

Vulnerabilities in Digital Customer Onboarding and Verification

The shift towards digital customer onboarding in the financial sector, while convenient, has opened up new vulnerabilities. Fraudsters are increasingly exploiting these weaknesses, especially in identity verification and customer due diligence processes. This trend is manifesting in various forms, including synthetic identity fraud and manipulation of digital documentation.

Mitigation Strategies:

  1. Advanced Identity Verification Tools: Leverage cutting-edge technologies like biometric verification and AI-driven document analysis to enhance the accuracy of identity verification.
  2. Ongoing Process Evaluation and Enhancement: Continuously assess and refine digital onboarding processes to address emerging vulnerabilities.
  3. Integration of Diverse Data Sources: Employ multiple and varied data sources to corroborate customer information, strengthening the verification process.

KYC Data Breaches and Manipulation

KYC data is a goldmine for fraudsters. In 2024, there is a growing trend of sophisticated attacks aimed at breaching and manipulating KYC data. These breaches not only threaten customer security but also undermine the credibility of financial institutions.

Mitigation Strategies:

  1. Robust Data Security Measures: Implement and constantly update data encryption and other security measures to protect KYC data.
  2. Regular Security Audits: Conduct frequent and thorough audits of KYC data handling and storage practices.
  3. Advanced Anomaly Detection Systems: Use AI and machine learning-based systems to detect unusual patterns in data access or modification, indicating potential breaches.

Harnessing Signzy’s Expertise to Combat Emerging Fraud Trends

As we navigate through the evolving landscape of financial fraud in 2024, it becomes clear that the challenges are as dynamic as they are daunting. The trends identified – from the misuse of deepfake technology and AI-enhanced phishing attacks to the vulnerabilities in digital customer onboarding and the sophisticated breaches in KYC data – all point towards an urgent need for innovative and robust countermeasures. This is where Signzy’s expertise and solutions become invaluable.

Signzy, with its cutting-edge technological capabilities and deep understanding of the financial sector, is uniquely positioned to address these emerging threats:

  1. Combatting Deepfake and AI-Phishing Threats: Signzy’s advanced AI-driven solutions can play a pivotal role in detecting and neutralizing deepfake manipulations and AI-based phishing attempts. By integrating sophisticated algorithms capable of identifying even the subtlest anomalies, Signzy can provide a crucial layer of defense against these highly advanced fraud techniques.
  2. Securing Digital Customer Onboarding: Signzy’s technology excels in enhancing the security of digital onboarding processes. By utilizing a combination of biometric verification, real-time data analysis, and AI-powered document verification, Signzy can significantly reduce the risk of identity fraud and ensure a secure onboarding experience.
  3. Safeguarding KYC Data: In the face of increasing KYC data breaches, Signzy’s secure data handling and encryption methodologies are essential. By employing rigorous data protection measures and conducting regular security audits, Signzy ensures the integrity and confidentiality of sensitive customer information, thereby fortifying trust and compliance.
  4. Empowering Institutions with Real-Time Analytics and Compliance Tools: Signzy’s real-time analytics and compliance solutions enable financial institutions to stay ahead of fraudsters. By providing advanced tools for monitoring transaction patterns and customer behavior, Signzy aids in promptly detecting and responding to suspicious activities, thereby mitigating potential fraud.
  5. Partnering for a Secure Financial Ecosystem: Signzy’s commitment to collaboration and innovation positions it as a leader in the fight against financial fraud. By partnering with financial institutions, regulatory bodies, and technology experts, Signzy fosters a more secure and resilient financial ecosystem.

Together, let’s turn these challenges into opportunities to build a more secure, trustworthy financial future. The next step in financial security isn’t just about fighting fraud; it’s about pioneering the path forward!

Visit www.signzy.com for more information about us.
Contact us directly!

Combating Subscription Fraud

Combating Subscription Fraud in Telecom

Posted on | by Signzian

In our previous blog, we delved into the complex and challenging world of subscription fraud in the Indian telecom sector, shedding light on its mechanisms and impact. Now, we shift our focus to solutions and strategies. In this blog, we’ll explore the effective measures and innovative approaches that can be employed to combat subscription fraud. From cutting-edge technologies to robust regulatory frameworks, join us as we navigate through the proactive steps that telecom companies, regulators, and consumers can take to safeguard against these fraudulent activities.

In the fast-paced world of digital subscriptions, India has emerged as a fertile ground for opportunity. From streaming services to OTT platforms, e-commerce giants to food delivery apps, the subscription landscape is booming. However, this rapid growth has also attracted unwanted attention – the cunning specter of subscription fraud.

The Grim Reality of Subscription Fraud in India

Subscription fraud manifests in various forms, each aiming to exploit vulnerabilities in the onboarding process. Common tactics include:

  • Synthetic identities: Fraudsters create fake identities using stolen or fabricated data, often including PAN cards, Aadhaar numbers, and even bank account details. These seemingly legitimate identities then trick platforms into granting subscriptions without any intention of future payments.
  • Account Takeover (ATO): Hackers steal existing user credentials and gain access to active subscriptions, racking up charges before the rightful owner realizes the breach.
  • Sim Swapping: By tricking mobile operators into transferring phone numbers associated with subscriptions, fraudsters divert billing notifications and gain unauthorized access.
  • Carding: Stolen credit card information is used to subscribe to services, leaving the rightful cardholder to deal with the financial repercussions.

These fraudulent activities cause significant financial losses, erode trust in digital platforms, and create a negative user experience. A 2021 report by Juniper Research estimated that global subscription fraud will cost businesses a staggering $20 billion by 2025. In India, the problem is particularly acute, with a 2022 report by Experian revealing that 32% of online transactions are attempted using fraudulent data.

Why is India Vulnerable?

Several factors contribute to India’s susceptibility to subscription fraud:

  • Rapid digitization: The rapid adoption of digital services, coupled with a growing tech-savvy population, presents a vast attack surface for fraudsters.
  • Weak KYC norms: Traditional paper-based KYC verification processes are often unreliable and susceptible to manipulation.
  • Financial inclusion: The increasing use of digital wallets and other alternative payment methods creates additional avenues for fraud.
  • Lack of awareness: Many users remain unaware of the red flags and risks associated with online subscriptions, making them easy targets.

How is Signzy Combating Subscription Fraud?

In this scenario, Signzy emerges as a beacon of hope.

Signzy’s AI-powered identity verification platform leverages cutting-edge technologies to combat subscription fraud and safeguard businesses and users alike. Here’s how:

  • Digital Document Verification: Signzy’s solution verifies the authenticity of uploaded documents like PAN cards, Aadhaar numbers, and bank statements in real-time. Advanced checks like liveness detection and document tampering analysis prevent the use of forged documents.
  • Video KYC: Conducting live video KYC through Signzy’s platform verifies a user’s identity by comparing their facial features with their government-issued ID photos. This human-in-the-loop approach offers an extra layer of security.
  • Fraud Screening: By unearthing hidden patterns and assigning a quantifiable risk score, Signzy empowers platforms to make informed decisions and foster a secure and thriving digital ecosystem. In the ongoing battle against subscription fraud, Signzy’s vigilant screening stands as a beacon of hope, ensuring that the light of trust continues to shine on the path of digital progress.
  • Continuous Monitoring: Even after onboarding, Signzy’s solution provides ongoing monitoring of user activity, detecting suspicious transactions and potential ATO attempts in real-time.

Beyond Technology: Building a Collaborative Ecosystem

Tackling subscription fraud requires a multi-pronged approach. Signzy actively collaborates with:

  • Financial institutions: Sharing data and insights to identify and blacklist fraudulent actors.
  • Law enforcement agencies: Providing assistance in tracking down and prosecuting cybercriminals.
  • Industry bodies: Raising awareness about subscription fraud and advocating for stronger KYC norms.
  • Consumers: Educating users about safe online practices and encouraging them to report suspicious activity.

A Brighter Future

By combining cutting-edge technology with collaborative efforts, Signzy is leading the fight against subscription fraud in India. As awareness grows and platforms adopt robust verification processes, the digital landscape will become a safer and more secure space for both businesses and users.

The journey to eradicate subscription fraud is ongoing, but with proactive measures and innovative solutions like Signzy, we can pave the way for a brighter future of trustworthy and secure digital subscriptions in India.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs, easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.
Contact us directly!

Dormant Accounts

Dormant Accounts: Tighter Fraud Control by RBI

Posted on | by Signzian

Dormant accounts: Waking up to easier reactivation and tighter security with RBI’s new rules! The Reserve Bank of India (RBI) has introduced new regulations to simplify reactivating dormant bank accounts and tackle fraud risks. Key changes include location-independent KYC submission, video-based customer identification (V-CIP), stricter monitoring, and term deposit reviews. These reforms benefit both account holders (easier reactivation, no fees) and banks (reduced paperwork, fraud prevention).

Let’s dive in!

Reactivating Dormant Accounts Just Got Easier!

Gone are the days of trekking to your original bank branch just to reactivate a dormant account. Under the new rules, you can now submit your KYC documents at any branch, regardless of its location. This flexibility makes the process more convenient and accessible, especially for those who have moved or whose original branch is no longer operational.

For the tech-savvy, the RBI offers a futuristic option: video-customer identification process (V-CIP). If your bank provides this service, you can skip the physical visit altogether and get your account back on track through a secure video call.

But the best part? No more surprise fees or penalties! Banks are prohibited from charging you for the reactivation process itself, and they can’t penalize you for not maintaining a minimum balance in your dormant account. This removes a financial barrier and encourages account holders to bring their neglected funds back into circulation.

Enhanced Security Measures for Dormant Accounts

While simplifying reactivation, the RBI hasn’t forgotten about the lurking threat of fraud in dormant accounts. To combat this, banks are now mandated to conduct annual reviews of accounts that haven’t seen any customer transactions for over a year. This proactive approach helps identify dormant accounts that might be vulnerable to unauthorized access or misuse.

Once an account is reactivated, it will be placed under stricter scrutiny for at least six months. This heightened monitoring, conducted at higher levels within the bank, aims to detect any suspicious activity and nip potential fraud in the bud.

Term Deposits and Zero-Balance Accounts Covered

The RBI’s reach extends beyond just dormant savings accounts. Term deposits, for instance, are also covered under the new regulations. Banks must now review these deposits if you haven’t withdrawn the proceeds or transferred them to another account after maturity. This prevents your funds from slipping into the limbo of unclaimed deposits and ensures you receive what you’re rightfully owed.

Even zero-balance accounts, often used for government schemes and scholarships, receive special consideration. These accounts won’t be classified as “inoperative” even if unused for two years, recognizing their specific purpose and ensuring beneficiaries continue to receive their entitlements.

A Timeline for Dormant Account Reactivation

Mark your calendars! The RBI’s new dormant account regulations take effect April 1, 2024, for all banks, including yours. From forgotten savings accounts to matured term deposits and special zero-balance accounts, it’s time to streamline your processes and ensure compliance.

The Takeaway

The RBI’s new rules for dormant accounts are a win-win for both convenience and security. They make reactivation easier, eliminate unnecessary fees, and provide robust safeguards against fraud. The time to act is now! With April 1, 2024, just around the corner, prepare to welcome a surge in reactivated accounts and unlock their full potential. Dust off those dormant files, partner with Signzy, and watch your business flourish under the RBI’s secure and convenient new regulations.

Signzy VKYC: Seamless Dormant Account Reactivation Under New RBI Rules

The RBI’s new regulations have made revitalizing dormant accounts a breeze, but banks still face challenges verifying customer identities efficiently. This is where Signzy’s VKYC API shines, streamlining the KYC process and making reactivation even smoother.

Imagine a customer walking into any branch across your network, eager to resurrect their long-dormant account. With Signzy’s VKYC API integrated into your system, the process is as simple as a video call. No more mountains of paperwork, no more waiting for physical document verification. The customer simply connects with a representative through a secure video link, presents their ID, and voilà! Their identity is verified in real-time, thanks to Signzy’s AI-powered facial recognition and document authentication.

The benefits for banks are numerous. Reduced paperwork cuts processing costs and turnaround times, leading to happier customers and improved operational efficiency. The real-time verification eliminates fraud risks associated with traditional, document-based methods. Plus, the VKYC API’s flexibility allows integration with existing infrastructure, making implementation seamless and hassle-free.

In a nutshell, Signzy’s VKYC API is the perfect complement to the RBI’s new dormant account regulations. It simplifies reactivation for customers, minimizes risk and cost for banks, and ultimately promotes a more secure and efficient financial ecosystem. So, the next time you’re thinking about dormant accounts, remember that Signzy’s VKYC API can be your key to unlocking a win-win situation for everyone involved.

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