What is Aadhaar KYC Verification and How To do It Online?
Owing to regulatory advancements in 2020, paperless financial inclusion has become an everyday reality. Whether you are availing a home loan or investing in mutual funds, KYC compliance is essential. However, the integration of UIDAI systems has made this process less time-consuming and hassle-free. Customers can carry out the electronic authentication process without any hassle when availing a new mobile connection, opening a bank account, etc.
Scroll down to get a better idea regarding the Aadhaar KYC verification process, its benefits, and more!
How to verify KYC online
1. Via biometric authentication
- Step 1: To begin this process, give your Aadhaar card to the respective service provider, who will note down your Aadhaar number.
- Step 2: Next, they will scan your iris and fingerprints.
- Step 3: After that, the value is transferred to the UIDAI to match against the existing value, stored in the central database for your Aadhaar number.
- Step 4: Your identity will be verified successfully once both the values match.
After completion of this process, service providers will get to access your personal details such as name, address, etc. Note that UIDAI also allows the agent to keep a soft copy containing these details stored in their servers so that they can assess them later if required.
2. Via mobile OTP authentication
- Step 1: Provide your Aadhaar card details to the service provider.
- Step 2: A one-time password will be generated and sent to your registered mobile number.
- Step 3: Submit the OTP to complete the transaction successfully.
After that, UIDAI will share the necessary details in a similar manner with the agent or organisation.
A large number of insurance companies, mutual fund houses, stockbrokers, etc., use e-KYC to verify consumer details.
What Is the Impact of E-KYC on Aadhaar Enrolment?
The paperless e-KYC is basically a secure and shareable document that anyone with an Aadhaar number can use for offline identification. It enables service providers or Offline Verification Seeking Entities to access customers’ details like name, address, date of birth, etc.
With the arrival of the e-KYC process, maintaining all documents has become much easier since it is electronic and paperless. Note that UIDAI does not provide the customers information without their consent; therefore, their privacy always remains protected. In 2019, the Ministry of Finance’s revenue department approved the use of e-KYC, and with that, the identity verification process has become a low-cost affair as well.
Are you still wondering how that is going to help? Refer to the following section to understand it better.
What Is the Purpose of Aadhaar Based e-KYC?
From applying for a credit facility to availing of a new phone number, everything involves producing a number of documents for verification purposes. Naturally, the process tends to get taxing, especially if you have multiple requirements to meet.
However, the incorporation of e-KYC has made things easier for both the service providers and consumers as this service is free from manual intervention and time-saving.
Let’s give you a real-life example to elaborate the system a bit. Suppose you are planning to opt for an insurance policy, and your insurance provider needs to verify some of your personal information. Since the e-KYC is linked to your Aadhaar card, the insurer can easily obtain all necessary personal information.
Advantages of Aadhaar based e-KYC
Apart from ensuring efficiency and convenience, here is a list of benefits that Aadhaar KYC verification offers:
- Customers do not have to bear any cost for this authentication process.
- Since the information is acquired from the UIDAI’s official portal and already verified, one can rely on it completely.
- This process is compliant with Government standards, and the documents are shared via a secure channel, ensuring transparency.
- Consumers’ privacy does not get compromised as the biometric scanners that various agencies or companies use are verified by UIDAI.
- Even though any service provider can use it, your consent will be required.
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Final Word
The arrival of e-KYC or Aadhaar KYC verification has expedited the documentation process for financial transactions. Also, due to the lack of human intervention, the procedure inevitably becomes error-free and cost-effective at the same time.
FAQs
Ans: No, the online e-KYC method is not available to all the agencies as some of them do not even possess the technical infrastructure required for this. Other than that, this method also requires reliable connectivity, which might be an issue for a lot of organisations.
Ans: No, the unique 12-digit identification number is not necessary for this purpose. However, this particular document is considered a single source of verification. That is why you should consider applying for your Aadhaar number and make the most of the e-KYC benefits.
Ans: The details that service providers will be able to obtain are the resident’s name, address, date of birth, photo, reference number, gender details, mobile number and email ID. The data are encoded using a ‘Share Phrase’ that you will get while downloading the e-KYC.
Ans: Even though having an Aadhaar card is necessary for the Aadhaar KYC verification purpose, you do not need to submit any physical copy of the Aadhaar card for that. This is a paperless process and involves the submission of your Aadhaar card number only.
Ans: No, private institutions or agents cannot share or exhibit consumers’ personal details that they obtain from e-KYC. In case something like that takes place, the concerned organisation will be penalised under Sections 17 and 25 of The Aadhaar Authentication Regulation, 2016, Sections 4 and 6 of The Aadhaar -Sharing of Information Regulation, 2016 and Sections 29(2), 29 (3) and 37 of The Aadhaar Act, 2016.
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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
