What Is e-KYC - Types, Process & Advantages

source: bangkokpost

KYC compliance has been mandated by the government when undertaking a financial service like buying life insurance or taking a loan. This helps financial institutes and banks establish their customers' credibility and confirm their identity.

However, now that all offerings and financial instruments are made digital, their verification is also following suit. e-KYC is a digitised version of the following KYC protocol. So, no more waiting in the queue and carrying extensive documentation. Learn more about what e-KYC is, its types, verification process and others below!

e-KYC, also known as paperless KYC, is a process to verify a customer's credentials electronically. All must follow this process to avail any financial services. However, this online process can only be voluntarily followed by Aadhaar card holders since the service providers access the details of a customer through his or her Aadhaar card using the UDAI database for the e-KYC verification process.

Using this Unique Identification Authority of India (UDAI) database, the service providers can get proof of identity and address without following the tedious physical verification.

There are multiple methods of how to do e-KYC. For example, one can complete the process using the OTP method, while others can follow Aadhaar biometric authentication or an offline paperless process. Follow its brief discussion below:

1. Online Aadhaar e-KYC Using OTP

If a customer's mobile number is linked to his or her Aadhaar card, then the person can initiate the e-KYC process using OTP or the one-time password method. For this purpose, the customer may need to select the option mentioning 'Generate OTP' and put in the OTP sent to his or her mobile number for verification.

2. Online e-KYC Aadhaar Biometric Authentication

Individuals can also complete their e-KYC verification process using Aadhaar Biometric Authentication. To follow this process, customers first need to place a request for a biometric process while submitting their registration application. Seeing the request, the officials send a representative to their customer's registered address, and he/she matches their biometrics with the UDAI database using a scanner.

3. Offline Aadhaar Paperless e-KYC

Individuals can follow the offline Aadhaar paperless e-KYC process by sharing their identity data using QR code or XML. For this, customers may share their Aadhaar offline XML document with the financial centres by downloading it from the official UDAI website. Since this report is encrypted and does not give out sensitive information, it is safe to share.

Both Indian residents and NRIs are eligible for e-KYC. NRIs must have lived in India for at least 182 days in 12 months before their enrollment for Aadhar cards.

Moreover, they should be able to produce their Aadhar number and details during this process, as it will be incomplete without this document. Their Aadhar cards should be linked to mobile numbers to generate OTP during this process.

Since e-KYC is digital verification of the data available in the Aadhaar database, having an Aadhaar card is enough. There are no other additional documents required for the e-KYC process. However, in some cases, the service providers may ask their customers to submit passport-size photographs to complete the process.

If getting e-KYC process via a SEBI-registered intermediary or other financial institution, the centre may require individuals to enter their Aadhaar number and upload a copy of their e-Aadhaar. Also, it must be self-attested. Apart from this, if the agency requires any other documents, they will mention them in their KYC registration portal itself.

Aadhaar based e-KYC process depends on the available information provided by an individual to UIDAI to get a unique 12-digit Aadhaar number. Using this number, anyone can easily invest in fund houses as any licensed service provider can verify their investors' credibility, risk profile, and financial status.

Here is a step-by-step guide explaining how to do e-KYC online in two ways and offline in one way using the help of registered financial agencies:

Online Aadhaar e-KYC Using OTP

Step 1: Search for any official website available online of a known customer registration agency.

Step 2: Sign up by giving out your details.

Step 3: Next, the site will require Aadhaar card details and your phone number.

Step 4: Fill up the necessary blanks and enter OTP to complete the process.

Step 5: Upload a self-attested copy of your Aadhaar card and agree to the terms.

Online e-KYC Aadhaar Biometric Authentication

Step 1: Login into the KRA's official website using registered credentials.

Step 2: Follow the same KYC request process as mentioned in the above section.

Step 3: Opt for a biometric authentication process present in the columns.

Step 4: Complete biometric verification.

Step 5: Upload documents as required and wait for the approval.

Step 1: Visit the official Aadhaar card site and download Aadhaar paperless offline e-KYC form.

Step 2: Fill up the form and submit it along with the documents required.

Step 3: It will give you access to an XML file containing all useful information with UIDAI digital signature.

Step 4: You can provide this XML file to relevant requesting agencies and complete the offline Aadhaar paperless e-KYC process.

It will depend on the KRA which an individual chooses to carry the e-KYC verification process and what will be the process to check the e-KYC status online. Each KRA will give a separate provision for applications requiring customers to enter PAN details and check their status. Also, the steps will vary among the different KRA. Some registered KRA are NSE KRA, CVL KRA, Karvy KRA, NSDL KRA, and CAMS KRA.

There are several advantages of carrying out a paperless identity verification or e-KYC process. Some of these include:

• There is no threat of sensitive information falling into the wrong hands as one can only complete his or her e-KYC verification process through institutes certified by UIDAI.
• One can complete this process without incurring any cost.
• Since e-KYC is an online process, customers can save a lot of their time and effort.
• When accessing any financial service like opening a bank account, buying life insurance, activating a third-party wallet, etc., it becomes very handy to verify credibility as e-KYC offers an instant verification process.
• For Aadhaar based biometric verification, representatives only use those scanners managed and regulated by UIDAI, which again ensures data safety and security.

In the above sections, we have covered what is e-KYC, the process to apply for verification and its advantages. It is an obligation for all individuals to follow this process to avail any financial services or verify their identity. Also, since it is a digital process, it makes it very easy to buy policies or open accounts in the fastest way possible.