Yes, it is mandatory if users want to enjoy full functions of Touch 'n Go eWallet (i.e. funds transfer) and higher limit (RM5000). It is a regulatory requirement in accordance to BNM guideline on AML/CFT.
Please refer to Part B AML/CFT Requirements, Section 14D CDD, available here, http://amlcft.bnm.gov.my/publication/AML_CFT_TFS_PD.pdf
However, no eKYC is required for users with basic functions and lower limit (max of RM200)
Below are related articles that might be useful for you :