OTP based e-KYC for Savings Account

What is the OTP-based e-KYC process and how does it work? 

In accordance with a recent directive, you can now ask the bank to complete the KYC verification process when opening an account by sending an OTP to your mobile phone. However, there are particular rules pertaining to accounts formed in this way: 

1. For these accounts, the maximum deposit amount is Rs.1 lakh. 
2. Within a fiscal year, the total amount of money deposited in these accounts cannot exceed Rs. 2 lakhs. 
3. In a year, term loans up to Rs.60,000 can be approved. 
4. Banks must finish the official KYC process within the allotted time limit, or the account will be cancelled. The account must be transformed into a regular account within a year. 
5. A declaration stating that you haven't opened and won't open another account using OTP-based KYC—with the same bank or with a different one—must be submitted.
   

Benefits of OTP-based eKYC 

The benefits of OTP-based eKYC are given below: 

1. Paperless Process: This approach eliminates the necessity for physical documents, reducing paper consumption and contributing to environmental sustainability. Banks can foster a greener ecosystem by replacing traditional paper-heavy processes. Additionally, customers are relieved of the burden of physically storing or carrying vital documents like the Aadhaar card and PAN card, reducing inconvenience and risk. 
2. Regulatory Compliance and Efficiency: OTP-based e-KYC helps banks align with regulatory requirements while expediting the account opening procedure. 
3. Accessibility: OTP-based e-KYC empowers individuals to open various savings accounts from the comfort of their homes, offices, or any location with a mobile phone, internet access, and Aadhaar card details. This is especially beneficial for those residing in remote areas or individuals with limited mobility, expanding financial access to a broader audience. 

1. Cost-Efficiency: Traditional account opening processes involve manual paperwork and labor-intensive steps, increasing operational costs for banks. By embracing OTP-based e-KYC technology, banks can eliminate physical documentation, streamline operations, and reduce expenses. These savings can be transferred to customers in the form of more attractive interest rates and reduced fees. 
2. Enhanced Security: This method enhances security by sending a one-time password to the customer's registered mobile number. This extra layer of security verifies the customer's identity, helping to prevent identity theft and fraudulent activities. Customers can confidently explore savings account options without concerns about the safety of their personal information. 
3. Customer Satisfaction: OTP-based e-KYC enables customers to complete the verification process swiftly and conveniently, eliminating the need for extended waiting times and complex paperwork. The process is transparent and efficient, simplifying the process of opening a new bank account for customers. The accuracy and validity of customer information are easily confirmed through the OTP, resulting in expedited processing times. This, in turn, leads to contented customers who appreciate the efficiency of the service. 

In essence, OTP-based e-KYC offers a paperless, accessible, cost-effective, and secure method that enhances customer satisfaction while streamlining the account opening process for both banks and their valued customers.