eKYC

e-KYC, or electronic Know Your Customer, is a paperless and digitised process of verifying the identity of an individual or an organisation via Aadhaar authentication. In simple words, e-KYC means the digitised form of the traditional ‘Know Your Customer’ protocol. RBI has made it mandatory for financial institutions to implement the KYC process when authenticating an individual’s personal information. 

 

Banks, financial institutions, and other entities can verify their customers’ identities quickly and efficiently without requiring physical documents through e-KYC. This process involves the use of biometric data, such as facial recognition or fingerprints, to authenticate the customer’s identity.

The Unique Identification Authority of India (UIDAI) offers a mechanism to authenticate and verify the identity of an Aadhaar Cardholder via online e-KYC service. The Aadhaar-based e-KYC relies on the information you provide to UIDAI to receive the unique 12-digit Aadhaar number. Financial service providers can digitally verify your identity through e-KYC using the e-KYC Application Programming Interface (API). Moreover, licensed financial institutions let you transact only after completing the authentication process from the UIDAI database.

 

e-KYC helps reduce the time and cost involved in the traditional KYC process, making it convenient for customers to interact with banks and other institutions. It is a smart step towards expediting, streamlining, and securing customer onboarding within the financial sector.

e-KYC enables banks, financial institutions, and other service providers to simplify and streamline customer verification processes. The e-KYC service allows quick and easy identity verification without requiring physical documents. This significantly reduces the time, cost, and effort that goes into the traditional KYC processes.

 

Another major benefit of e-KYC is security. Your data is secured privately, as only authorised financial institutions and agents can access the UIDAI database. It also reduces the risk of fraud and identity theft by ensuring that only genuine and verified customers are on-boarded by financial institutions.

 

Moreover, biometric verification adds another layer of security to your personal information. e-KYC is required in the following scenarios:

• Opening a bank account

• Opening a demat account

• Purchasing and claiming financial assets

Depending on your preference and convenience, you can register for the e-KYC service online or offline. The three different types of e-KYC are mentioned below.

1. Online Aadhaar e-KYC Using OTP

You can follow these steps to sign up for e-KYC using OTP.

• Step 1: Visit the official website of any known KYC registration agency (KRA).

• Step 2: Using your personal information, create an account.

• Step 3: Provide your Aadhaar number and the mobile number linked to your Aadhaar Card.

• Step 4: Enter the OTP sent to the mobile number.

• Step 5: Submit a self-attested copy of your e-Aadhaar.

• Step 6: Read the declaration forms, and click ‘Agree’ to finish the process.

2. Online e-KYC Aadhaar Biometric Authentication

You must follow these steps to complete your Aadhaar KYC verification electronically using your biometrics.

• Step 1: Visit any known KRA’s official website.

• Step 2: Create an account, and provide your Aadhaar and mobile numbers.

• Step 3: Select the biometric authentication online option.

• Step 4: An authorised representative will get in touch and schedule a house visit.

• Step 5: Provide biometric verification.

• Step 6: Furnish original documents, which can also be done over video

• Step 7: Wait for the KYC request approval.
  

3. Offline Aadhaar Paperless e-KYC

If you aren’t comfortable with online registration, you can follow the offline Aadhaar e-KYC process. This process entails downloading your KYC XML file and providing it to the agency that requires your KYC. You can download the XML document from the UIDAI website.

 

Furthermore, the document is encrypted and does not disclose sensitive information that the KYC verification agency does not require. Alternatively, you can share the QR code available on your Aadhaar Card that can be scanned to access information related to your identity.

The e-KYC has several of these benefits, and a few are listed below.

• Privacy: A reference ID is required to access your data and complete e-KYC verification. Moreover, each e-KYC document is signed by the UIDAI and can only be opened by licensed entities

• Security: The distribution of biometric verification for Aadhaar-based KYC is regulated and managed by UIDAI

• Availing of Financial Services: e-KYC is mandatory if you want to avail of any financial services, from opening a bank account to trading in equities and opening e-wallets

• Free and Accessible: As the entire process is online, e-KYC is simple, easy, and quick. Moreover, there are no charges associated with e-KYC.

You must have an Aadhar Card in order to be eligible for an e-KYC. The UIDAI provides you with a card and a 12-digit number for your identity details. Note that you can’t proceed with e-KYC without an Aadhaar Card. 

e-KYC refers to the digital verification of data that is already accessible in the Aadhaar database. Therefore, you are not required to provide additional documents along with your application form. 

 

However, in the case of online e-KYC biometric verification, you may have to submit your passport-sized photographs while authenticating your biometrics.

The e-KYC process eliminates the need to provide a copy of the Aadhaar letter. Once you decide to opt for a financial service, the institution begins the e-KYC verification process. You must fill out the Aadhaar-based verification application, and allow the financial institution to verify your information from the UIDAI database.

 

You won’t have to provide any additional documentation, and your identity will be verified within minutes.

To check your e-KYC status online, you can visit the KYC registration agency’s (KRA) website and follow these steps.

• Step 1: Head to the Central Depository Service Limited’s (CDSL) official website.

• Step 2: Click ‘Inquire Your KYC’ to check the e-KYC status.

• Step 3: To log in, provide the required details, such as your Aadhaar number or PAN.

• Step 4: Enter the captcha and click ‘Submit’.

• Step 5: Your e-KYC verification status will be displayed on the screen.

   

The status will show ‘Verified by NDML’ if the KYC application is verified. If not, the status will appear as ‘Pending’. 

An agent may also use the following offline e-KYC methods to authenticate your identity.

• mAadhaar App: It is a mobile-based app developed by UIDAI, allowing financial agencies to access demographic data.

• QR Code Scan: The service provider can scan the QR code given on your Aadhaar Card to access identity information using a smartphone

• Paperless Offline e-KYC: You can provide your Aadhar details by downloading KYC XML from the UIDAI website. Agencies can access it using a reference ID. 

   

KYC is a mandatory process that you must complete to access even the most basic financial services. When opening a bank account or getting a credit card, a financial agency will ask you to complete the e-KYC process. 

 

Luckily, with e-KYC services, you can do away with the need to submit additional KYC documents and complete the entire process in a matter of minutes.

Several popular banks, such as the State Bank of India (SBI), Axis Bank, HDFC Bank, RBL Bank, etc., offer e-KYC verification to save you time and money.

In September 2018, the Supreme Court issued a landmark judgement precluding private institutions from using Aadhaar e-KYC for verification purposes. Subsequently, UIDAI allowed private entities to use Aadhaar e-KYC for authentication purposes. Furthermore, the introduction of the Aadhaar and Other Laws (Amendment) Act, 2019 enabled the option of online KYC verification. This Act allows you to voluntarily use online KYC verification by providing your Aadhaar number to verify your identity.

 

The verification process can be carried out through Aadhaar-based online KYC verification or offline e-KYC. As a result of these new regulations, only private entities that the UIDAI has verified are permitted to carry out online KYC verification. This measure ensures that your data remains secure, and prevents it from being misused.

You can apply for an e-KYC by following a few simple steps given below.

• Step 1: Visit the official website of any KYC Registration Agency, bank, or fund house that offers the service.

• Step 2: Fill out the application form and choose among the OTP, biometric, and offline paperless KYC methods to complete the verification.

• Step 3: Once the financial institution has access to the details from the UIDAI database, they will verify and confirm your identity.