The Insolvency and Bankruptcy Code has included PAN card at par with other officially valid documents to verify the identity of users, according to revised technical guidelines issued by the insolvency regulator on Wednesday.
PAN card will now also be used as identity verification. In fact, according to the revised technical guidelines issued by the insolvency regulator on Wednesday, the Insolvency and Bankruptcy Code includes PAN card at par with other officially valid documents, so that the identity of users can be verified. Information utilities store financial information about debtors in electronic databases and eliminate incorrect information, and reduce delays and disputes in bankruptcy proceedings. Experts say that making PAN card valid for identity verification will make the financial process easier. This will benefit on a large scale.
As per the revised guidelines issued by the Insolvency and Bankruptcy Board of India (IBBI), information utilities are required to obtain sub-authentication user agency licence from the Unique Identification Authority of India (UIDAI) for demographic authentication of users during the registration process.
Information on corporate debtors will be required
The Insolvency and Bankruptcy Board of India (IBBI) has now mandated information utilities (IUs) to use PAN or any other official document to verify the identity of users who want to access information on corporate debtors. Under the Insolvency and Bankruptcy Code (IBC), IUs are required to maintain an electronic database of information of any CD, including records of its loans, balance sheet and cash flow statement, assets, etc. Overall, the amendment reflects a proactive and pragmatic approach from the IBBI, making the mechanism more transparent with seamless processes and procedures, say experts.
The government has come up with PAN 2.0
The government has come up with PAN 2.0. PAN 2.0 will be similar to the m-Aadhaar or e-Aadhaar system. Now the question in your mind is whether PAN 2.0 will have dynamic QR codes for KYC, identity verification or address proof purposes? Let us tell you that the PAN card serves as both a tax identifier and a physical identity proof. Under the new PAN 2.0 project, the system is converting to digital format. The government has allocated Rs 1,435 crore for a comprehensive upgrade of the existing PAN infrastructure. The government has said that PAN 2.0 will be an advanced version that will enhance user convenience. Currently, the electronic version of PAN 1.0 has limited KYC application and cannot serve as address proof in any form.
Experts believe that additional clarification is needed about the dynamic QR code features of PAN 2.0, particularly its ability to display residential information. “In its current form, PAN is necessary but not sufficient for KYC. It is not classified as an OVD (officially valid document); rather it is a unique identifier used for tax and anti-money laundering purposes. The regulated entity in addition to collecting the PAN (i.e. number) will still have to collect an ID card (OVD). Though the current PAN card format does not meet KYC requirements, its linking to Aadhaar can enable KYC verification.
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