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.