What is eKYC? Meaning, Documentation, Process, Eligibility

This is a digital age where everything can be done online. From ordering groceries to availing of loans, people can do almost anything online. However, exposing private and sensitive information online also makes people more at risk for online fraud and privacy leaks.Financial institutions, in particular, must have strict verification and encryption processes that protect their customers. Regulations have been put in place in India to ensure a seamless onboarding process online while placing utmost importance on security.Every financial institution has to follow the e-KYC process mandatorily so that they provide a wide range of online financial services to customers. These include opening a bank account, managing the bank account, making investments in financial instruments, applying for loans and much more.

Electronic Know Your Customer or e-KYC is a digital version of the Know Your Customer protocol that has been made mandatory by RBI. Financial Institutions have to follow this process to verify and authenticate customer information. e-KYC is done by authenticating the Aadhaar card of the applicant, which instantly gives the financial institution access to the customer’s personal data like identity, address, etc. This typically uses biometric verification for online identity verification, which makes it an extremely secure process.Benefits of e-KYC

1. Enhanced security is offered through biometric verification, which lowers the probability of identity theft.
2. Ease of customer onboarding from anywhere and at any time.
3. Extremely fast and sustainable processing of applications with paperless methods and one-click services.
4. Only selected organisations are licensed by UIDAI to carry out the e-KYC process, which helps protect personal data and does not disclose it to third parties.
5. With over 99% of the population above the age of 18 already enrolled in digital verification, this system is the go-to system for financial institutions.

Also Read: What is KYC? Meaning, Documentation & Process

e-KYC does not require any physical documents to be submitted apart from the passport size of the applicant. By opting for e-KYC, the applicant is allowing the service provider to gain access to the electronic version of the applicant’s data. These include the name, address, gender, contact details, date of birth and other personal information. Therefore, documents like address proof will not be required to be submitted.If the customer is completing the e-KYC for a SEBI -registered company, the customer will only have to enter the Aadhaar number and upload the digital version of the Aadhaar card. Any additional documents required will be mentioned on the portal, and all of their digital version will only be required.The customer can keep the following documents handy while doing the e-KYC:

1. Aadhaar Card (digital version, self-attested)
2. PAN Card
3. Passport Size Photo

Only those citizens of India that have an Aadhaar number can opt for e-KYC. This option is not available to anyone without an Aadhaar card. Those without an Aadhaar will have to opt for an offline KYC process which may take up to 7 days.

Customers can opt for Aadhaar OTP-based verification or Aadhaar biometric-based verification.

Aadhaar OTP-based online method.

1. Open the website of a trusted KRA (KYC registration agency).
2. Create an account using the personal details of the customer.
3. Enter the Aadhaar number and the mobile number linked and registered to the Aadhaar card.
4. The customer will receive an OTP on this registered mobile number.
5. Complete OTP verification. Ensure never to share the OTP with anyone else.
6. Once verification is done, upload a self-attested digital version of the Aadhaar card.
7. Click on the check box to agree to the declaration terms to finish the e-KYC.

Aadhaar biometric-based online method.

1. Open the website of trusted KRA (KYC registration agency).
2. Create an account using the personal details of the customer.
3. Select the option of biometric verification.
4. Wait for a representative to visit your address where you can submit the biometric proof.
5. Show original documents, which can also be shown online over a secure video call.
6. The approval, in this case, does not come immediately, so the customer will have to wait.

Steps to check the status of e-KYC

In order to check the status of e-KYC, the customer will have to enter the PAN card details. The specific steps to be followed depend on the trusted KRA (KYC registration agency). These are the SEBI-licensed KRAs:

1. NSDL Database Management Limited KYC Registration Agency
2. NSE Data Analytics Limited (DotEx International Limited) KYC Registration Agency
3. CDSL Ventures Limited (CVL) KYC Registration Agency
4. CAMS Investor Services Private Limited KYC Registration Agency
5. Karvy Data Management Services Limited KYC Registration Agency

Also Read : What is SEBI?

Since the entire process of e-KYC is largely dependent on the internet, it may not be possible for people with low connectivity to use these features seamlessly. Biometrics may also not be possible for a few. The government introduced the Aadhaar paperless offline method of e-KYC.Here, the applicant can download the KYC XML file from anywhere with a good internet connection, fill out the form offline and share it with the agency that will complete your KYC. A reference ID is shared with the individual using which the KRAs can access the information related to the applicant.

Follow these steps to complete the Aadhaar paperless offline e-KYC

1. Open the official UIDAI portal where offline Aadhaar applications can be submitted.
2. Type in the Aadhaar number and enter the captcha code from the screen.
3. Select the option of ‘Send OTP. Alternatively, the option of ‘Enter TOTP’ can also be selected.
4. An OTP will be received on the registered mobile number linked to the Aadhaar. The TOTP is available on the m-Aadhaar application on mobile.
5. Now generate a 4-character share code.
6. A ZIP file will be downloaded containing the applicant’s paperless application details. This file is password protected with the 4-character share code.
7. After entering the share code, the download button can be clicked.
8. The digitally signed XML will be downloaded as a ZIP file on the same device.
9. The share code (reference ID) has to be shared with the KRA so that they can access your paperless e-KYC details.

Aadhaar authentication refers to the process of verifying the personal information of the customer, like name, address, date of birth, and contact details, between the actual information submitted and the Aadhaar database. Authentication only results in true or false based on whether the information matches. e-KYC uses the customer’s biometric or OTP to get access to the person’s details from the existing database. This is typically done by banks or financial institutions to avoid identity-related fraud.Ready to make the most of your money? Start your tax planning journey now!