Electronically validating a customer’s credentials is known as eKYC or paperless KYC. For anybody to use the services of any financial institution, this is a requirement. Since your identity is confirmed electronically and the service provider may access your Aadhaar information from the Unique Identification Authority of India (UIDAI) database, it is also known as Aadhaar-based eKYC.
eKYC eliminates the need for time-consuming in-person verification by instantaneously providing the service provider with your confirmation of identification and address. Aadhaar-based eKYC relies on the data that a person gives to UIDAI in order to obtain their special 12-digit Aadhaar number.
As fund firms use the eKYC Application Programming Interface (API) to access your Aadhar information, investing in them is simple once you have your Aadhaar number. Any licensed service provider may then confirm a customer using this.
How does eKYC function?
The resident no longer has to produce a photocopy of their Aadhaar letter thanks to Aadhaar Paperless Offline eKYC; instead, they may download the KYC XML and give it to the organisations who need it. The procedure for how the agency can confirm the resident’s KYC information is described in the parts below. The KYC information is provided in XML that is machine readable and digitally certified by UIDAI, enabling the agency to confirm its legitimacy and identify any manipulation. The agency may also utilise its own OTP/Face authentication procedures to verify the user’s identity.
Information covered by eKYC
The following fields are contained in the XML when downloading or acquiring offline eKYC data.
- Resident Name
- Download Reference Number
- Address
- Photo
- Gender
- DoB/YoB
- Mobile Number
The paperless Aadhaar offline eKYC data is encrypted using a “Provide Phrase” that the owner of the Aadhaar number must share with other organisations in order for them to view KYC data.
What are the various types of eKYC?
1. Online eKYC for Aadhaar With OTP
Using the one-time password (OTP) issued to the cellphone number associated with your Aadhaar card, you may start the eKYC procedure online. To do this, you must select the “Generate OTP” option. To complete the eKYC procedure and verify your identity, enter the OTP.
2. eKYC Aadhaar biometric authentication performed online
Additionally, you have the choice to finish the Aadhaar KYC verification electronically by providing your biometric data. When completing your registration application, you must request online eKYC Aadhaar Biometric Authentication in order to do this. You would then be visited by a representative at the address provided in the application, who would use a scanner to compare your biometric data with the information on the UIDAI database.
3. Aadhaar paperless eKYC offline
Identity data is shared by XML or QR code during the offline Aadhaar eKYC procedure. By downloading it from the UIDAI website, you can share the Aadhaar offline XML document with the financial institution. The report is encrypted and does not divulge private data irrelevant to the agency responsible for KYC verification. As an alternative, you can also distribute the QR code on your Aadhaar card, which, when scanned, would provide access to identity-related data.
Eligibility criteria for eKYC
To apply for eKYC, you must have your Aadhaar number. Without this, you won’t be able to apply or register for eKYC.
What paperwork is necessary for eKYC online?
You are not required to submit any extra documentation with your application since eKYC refers to the digital verification of information that is already available in the Aadhaar database. To authenticate your biometrics, you could occasionally be requested to submit passport-sized photos, like with the online eKYC biometric verification.
How can you apply for an eKYC online?
Any KYC Registration Agency, fund house, or bank that provides the service has an online application for eKYC. To complete the verification, fill out the form and select one of the three options: OTP, biometric, or offline paperless KYC. The financial institution will check and validate your identification once they have access to the information from the UIDAI database.
Offline eKYC techniques
The following offline techniques can be used to confirm an individual’s identity:
- QR Code Scan: In this case, the service provider uses a smartphone to scan the QR code on your Aadhaar card to get the demographic data without having to consult the UIDAI’s Aadhaar database.
- mAadhaar App: This Open Demat Account App for mobile devices enables service providers to obtain demographic information.
- Paperless offline KYC: In this scenario, a client can download the KYC XML from the UIDAI website in place of submitting a photocopy of their Aadhaar card. A reference ID is shared instead of the Aadhaar number, and no biometric verification is necessary throughout this process.
How to check your eKYC status online?
By filling out an application on the website of any of the KRAs that have been granted a SEBI licence, you can check your eKYC status online. You will have to enter your PAN details to check your details.
SEBI-registered KRAs include:
- CDSL Ventures Ltd (CVL)
- Karvy Data Management Services Limited
- CAMS Investor Services Private Limited
- NSDL Database Management Limited (NDML)
- DotEx International Limited (DotEx)
How can KYC data be changed online?
By accessing the eKYC site of your choosing, such as any KRA, and selecting the ‘Update KYC’ option, you may modify digital KYC records. To establish the proof for the changes, enter the amended information and upload a scanned copy of the updated documents. You will then receive an OTP on the registered mobile phone number. You can click submit when the verification is complete, and the information will be modified within a week.
What advantages does eKYC offer?
- Your sensitive information is protected from leaking into the wrong hands since eKYC verification is only available through organisations that have been approved by UIDAI.
- UIDAI also oversees and manages scanners used for Aadhaar-based biometric verification, adding another layer of protection.
- Since it offers quick verification, eKYC is useful for obtaining financial services like establishing a bank account or activating a third-party wallet.
- eKYC is very practical and saves time.
- eKYC is fully cost-free.
- Even the most fundamental financial services, like establishing a bank account or receiving a credit card, require you to go through the KYC procedure.
How are Aadhaar eKYC and Aadhaar authentication different?
Aadhaar authentication and Aadhaar KYC differ in a few ways. Aadhaar authentication just confirms your credentials, but Aadhaar eKYC gives the service provider access to your data from the UIDAI database. Simply said, Aadhaar authentication may be used to verify identity without providing demographic information.
eKYC for Aadhar and governmental rules
In September 2018, the Supreme Court issued a landmark decision banning private companies from utilising Aadhar eKYC for verification. After that, UIDAI permitted private enterprises to use Aadhaar eKYC for authentication. With the help of the Aadhaar and Other Laws (Amendment) Act of 2019, people can now freely utilise their Aadhaar numbers for online KYC verification or offline eKYC to confirm their identities. In order to avoid the exploitation of your Aadhaar data, the new strict restrictions only permit KYC verification online for private businesses that have been approved by the UIDAI.
