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!
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.
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.
Apart from ensuring efficiency and convenience, here is a list of benefits that Aadhaar KYC verification offers:
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.
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.
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.
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.
Before you go…