The UIDAI has come up with the E-KYC service to make improvements to customer services. E-KYC enables an individual with an Aadhar number to allow UIDAI to disclose his / her personal information to service providers who wish to instantly activate services such as mobile connections, bank accounts, etc.
KYC or Know Your Customer is a compulsory process that most mobile companies and financial institutions require their customers to complete. Although an Aadhaar card can be used as a KYC document, the entire KYC process still takes a relatively long period of time to complete due to documentation. Aadhar E-KYC aims at eliminating paperwork and ensures that individuals can avoid the hasslesrelated to dealing with corrupt government officials. UIDAIs E-KYC services can be used by customers to go through electronic verification of their identity, thereby reducing the amount of time that would otherwise be spent on completing the process physically while opening a new trading account or bank account, or availing a new mobile connection, etc.
Nandan Nilekani, the Chairperson of UIDAI, recently stated that the latest service will not only modernise the procedure of on-boarding new individuals, but will also make it easier for existing customers to link their account to their Aadhar numbers, thereby increasing security too. UIDAIs E-KYC service is expected to extent the convenience offered to customers and residents will have the option to authorise the UIDAI to disclose any KYC information to service providers.
The Impact of E-KYC on Aadhar Enrolment
The UIDAI recently released a report according to which there were over 40 crore Aadhaar cards that were issued to individuals within the country until August 2013. The figure has increased significantly since the authorities started issuing the document in 2010.
Individuals who wish to authorise UIDAI to disclose their KYC information to service providers can do so in person either through the use of a One Time Password or via biometric authentication. Once the authentication has been successfully completed upon the consent of the customer, such details as the name of the resident, his / her date of birth, address, gender, email address, mobile number and photograph can be provided to service providers electronically.
Since the E-KYC service is completely electronic and paperless, the management of documents is also eliminated. Moreover, since the KYC data is released to service providers only upon the consent of the customer, his / her privacy is protected at all times. The process is also expected to facilitate speedier transactions while eliminating the need for tedious paperwork. E-KYC is also expected to improve customer convenience while significantly enhancing business efficiency across industries. In addition, E-KYC is also expected to lower the threat of identity misuse while eliminating document forgery.
In keeping with the Information Technology Act, 2000, E-KYC documents have the same legal weight as paper documents. Moreover, the use of digital signatures and encryption ensures that authorised parties will not be able to steal or tamper the information provided by the customer. E-KYC has already been recognised as a valid document for every financial service offered under the PML (Prevention of Money Laundering) Rules by the Ministry of Finance.
E-KYC offers benefits to service providers as well as customers. While the customers can avoid the tedium of endless paperwork, service providers can find solace in the fact that they will not have to deal with paperwork themselves, thus eliminating the requirement of photo copies and careful handling of documents. Since the whole process is centralised and the information is stored digitally, service providers and customers can both save money on paper costs. Also, all the information is stored electronically and is machine readable and can be used by service providers for audit, service, etc. The lack of human intervention in the process ensures that the process is error free and a low-cost affair.
Everything about Aadhar Based e-KYC
The number of documents that are needed while opening a bank account or procuring a financial product is a lot, which results in customers spending a lot of time and money on the same. Sometimes they may not produce the right documents or enough copies, ultimately resulting in a waste of time and money. However, the government has taken note of this and in order to make banking experience a little more easier, e-KYC has been introduced that is linked to their Aadhaar card. Having an Aadhar card, is therefore, highly beneficial. This article elaborates on Aadhaar linked e-KYC.
KYC stands for Know Your Customers and these guidelines were initially provided so as to ensure that banks would not be taken advantage of unduly. A lot of documentation is involved in procuring information regarding a customers identity and their finances, the e-KYC services ensures that these processes are a lot simpler and quicker.
Since e-KYC is linked to the customers Aadhaar card, banks and financial institutions can procure information about an individuals identity and finances through the card itself.
Advantages of Aadhar based e-KYC:
In case customers do not follow the above process, they will have to submit an attested address and ID proof, get email and mobile verifications done along with having to appear in person for verify identity. But through the Aadhar based e-KYC process, they will only have to provide their Aadhaar card.
Advantages of e-KYC:
This process is paperless and is completely safe. Forgery is not possible as customers need not submit multiple copies of all their documents, and this also reduces the chances of fraud and theft.
The process is much quicker and provides immediate results.
Organizations using e-KYC:
Apart from financial institutions, mutual fund houses, trading accounts, insurance companies, LPG service provides, stock brokers, railway authorities, stock exchanges and KYC registration agencies also use e-KYC.
Application Process for e-KYC:
It is quite simple and easy to apply for e-KYC.
- Customers will have to procure an Aadhar card.
- They will have to give their consent to their bank to access data from the Central Data Repository of UIDAI.
- Customers will have to go to their banks website and fill in the online application form and upload the required documents along with their photograph.
- An OTP (one-time password) will be generated and sent to the customers mobile number mentioned on their Aadhar card.
- OTP should be entered and the form should be submitted.
- The bank will contact the customer for physical verification through real time video verification. This process is called Electronic In-Person Verification.
- During this verification, customers will have to show their Aadhaar card or PAN card along with their bank statement.
- Once their KYC is registered, they will receive confirmation of it through mail or e-mail and this status can be verified online.
Sometimes customers may have to sign and send a physical KYC application form.
While customers wait for their verification, their bank requires an approval from the UIDAI in order to use the e-KYC service. Once all necessary details are procured, the customers account will be opened immediately.
e-KYC is a quick, simple and convenient procedure that can be utilized by every Aadhar card holding citizen of the country.
News About Aadhar KYC
Aadhaar based KYC compulsory for Direct Selling Industry
After the regulated sectors like banking, insurance, telecom and many more, now it is direct selling industry that is keen on implementing Aadhaar based KYC (Know your customer). The intent is to have better compliance with the norms and control over the process.
Today, direct selling is one of largest job generating sectors, currently employing 50 lakh people. The number is expected to rise to 1.8 crore individuals by 2025. To stay at par, direct selling companies are now rapidly processing Aadhaar based e-KYC for all independent representatives (IRs). It is considered one of the most reliable ways to identify verification.
4th November 2017
Aadhaar must for state board exams
The Uttar Pradesh Madhyamik Shiksha Parishad has made providing Aadhaar card data compulsory for students appearing for their state board examination in 2018.
Students will have to enter their Aadhaar card details while filling examination forms and will also have to display the same at the time of registration for class IX.
Authorities say that this move will help curb malpractices and identity fraud. This rule is applicable for all government schools, government-aided schools and private schools that are attached to the Uttar Pradesh state board.
This measure comes at a time when fake enrollments are seeing an unprecedented surge in the state.
29th May 2017
Less Than 31.88% of Children Below 5 Years Have Aadhaar In Bengal
Less than 31.88% of children under the age of 5 years have bene issued Aadhaar cards in Bengal, according to recently released data. The delay in handing out Aadhaar cards to children under 5 years has been attributed to confusion over the agency handling the Aadhaar enrolment process in the state.
While other states are under the purview of the Unique Identification Authority of India (UIDAI) when it comes to Aadhaar enrolment, the collection of the biometric data was done by the National Population Registry (NPR), an arm of the Union Home Ministry.As a result, Aadhaar cards to applicants below the age of 5 years began only 6 months ago, and officials are attempting to sort through the large number of applications.
The recent government notification making Aadhaar mandatory to be eligible for the midday meal programme had raised concerns in the state. However, the measure was revoked as it received a lot of flak, since a large number of children have not been allotted Aadhaar cards as of now.
10th March 2017
Colleges in Bhubaneshwar to Initiate Digital Payments
Bhubaneshwar Colleges that are assisted by the State have been asked to introduce a digital payment gateway for collecting fees from the students or for providing any services. They have been asked by the joint secretary of the government to set up infrastructure for the same. They can use any of digital payment modes such as credit card/debit card, internet banking, UPI, Aadhaar based POS, etc. Institutions that fail to do so may stop receiving government aid. The state government has also planned to register all the students of class X, class XI and class XII for Aadhaar cards.
16th January 2017
The government has decided to link all savings bank accounts to aadhar
The Centre has decided to link all the savings bank accounts with aadhaar number to enable digital transactions, especially at retail points. Around 30 crore people don’t have a mobile phone, and this measure will be a gateway for them to be linked to the digital economy. All that is required will be devices that support aadhaar, and biometric at the retail points. Finance Minister Arun Jaitley, and IT Minister Ravi Shankar Prasad have been presented with the task of implementing this measure. Out of the 112 crore estimated bank accounts across India, only around 40 crore accounts are linked with aadhaar. RBI has been pushing for the deployment of aadhaar-enabled POS machines across the retail set-up.
27th December 2016
Tamil Nadu Government to reach out to schools for student Aadhar enrollment
Tamil Nadu state government has now made it easy for students to get Aadhaar cards easily where the govt. Is to reach out to schools themselves and have children register under the Unique Identification Authority of India (UIDAI). The IT department of the State government is supposed to send certain designated staff to schools for biometric data collection of students and then send it to UIDAI for Aadhar card processing, printing and delivery to their respective owners. This initiative has been taken for quicker and hassle-free enrollment since many examinations are making it mandatory for Aadhar details to be provided for registration.
1st December 2016
Telenor Initiates Aadhar Based eKYC
Telenor India has initiated Aadhar based eKYC verification system in all 6 circles for SIM cards. As part of the pilot phase the verification facility is live in around 700 stores and new customers can get their SIM cards activated instantly. The Company has planned to start this facility in all the 2,000 retail stores by end of November. It wants to start Aadhar based SIM activation facility at 10,000 POS stations through tie-ups with small retailers and distributors in different parts of the country. DOT (Department of Telecommunication) has designed the framework for Aadhaar based verification facility for availing mobile connections and given instructions to the telecom companies on how to handle the details of POS stations and distributor centres.
8th November 2016
Punjab University holds Aadhaar Camp
In an effort to secure Aadhaar Cards for all its city residents the Unique Identification Authority of India (UIDAI) has decided to set up special Aadhaar camps in Punjab University for its students, staff and their dependents. University Institute of Engineering and Technology (UIET), University Institute of Legal Studies (UILS), University Health Centre and the Department of Physics will be holding a camp on October 21st and 22nd. The Department of Evening Studies, Department of Law, University Institute of Chemical Engineering and Technology (UICET), and the Panjab University Dental Institute will be holding camps on the 24th and 25th.
3rd November 2016