Mumbai, April 25: Finance Minister Nirmala Sitharaman emphasized the urgent need for significant changes in the Know Your Customer (KYC) process on Saturday. Speaking at the 38th foundation day event of the Securities and Exchange Board of India (SEBI), she urged the organization to take steps towards making KYC simpler and uniform across the entire financial system.
Sitharaman stated that there should be a KYC system that is straightforward, secure, and functional on all platforms. She pointed out that the current system creates difficulties for individuals, as they are required to provide the same documents and information repeatedly at different locations.
The Finance Minister stressed the importance of expediting this initiative, advocating for a collaborative approach to develop a unified system with the Financial Stability and Development Council and other regulators. She firmly stated that no citizen should have to undergo KYC verification multiple times across various platforms.
Furthermore, she highlighted the necessity of updating regulations in light of the rapidly changing financial markets. The regulations should not only address issues post-factum but also anticipate potential risks proactively.
Sitharaman identified the misuse of artificial intelligence, international financial fraud, and rising cyber threats as significant challenges. She suggested that future regulations should be principle-based rather than overly strict and complex, promoting innovation while safeguarding investors’ interests.
She also recommended soliciting public feedback when formulating new rules to ensure balanced and flexible regulations. Earlier this month, the Finance Minister remarked that India’s robust economic position and substantial foreign exchange reserves provide the Reserve Bank of India with greater flexibility in policy-making.
On April 6, during the golden jubilee celebration of the National Institute of Public Finance and Policy, she noted that India has the capacity to continue government spending (capex), reduce interest rates, and support affected sectors, a testament to the financial discipline maintained over the past decade.
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