Reserve Bank of India, in March 2012, had released a Guidance Note NFBCs on Fair Practices Code.
One of the points the Board Approved Policy should be clear is on the compliance of the KYC (Know Your Customer) guidelines as stipulated by Reserve Bank of India (RBI), including adequate due diligence of the customers.
By now, major Gold lending NFBCs Boards should have adopted the Policy based on RBI’s Fair Practices Code.
The immediate follow out is that the gold loan companies are adopting better customer identification practices.
The companies have started insisting on the Aadhaar card primarily to facilitate online verification of customer details. As the issuance of AADHAR cards are on the increase, this seems to be a good idea.
However, it is to be remembered that the verification facility has not been introduced by the authorities so far.
A news article mentions that the authentication service by UIDAI has commenced in Feb 2012. But, so far there is no news of any Service adopting the same. Like all product launched, the authentication service will be free of charge till December 2013.