What exactly is e-KYC?

Electronic know-your customer (e-KYC)

It could be defined as a procedure that would enable a customer to walk in to the bank with an Aadhaar number and open an account by only by getting his fingerprint scanned. With the help of Unique Identification Authority of India (UIDAI), bank’s system will pull out all data of the customer that is stored online which includes name, address, age and other relevant data necessary and it will also save a copy of the KYC document that remain stored in UIDAI’ servers. The bank will only print out the account opening form with all the details of the customers already in it.

However, it is not just opening bank accounts, it has become easy to buy insurance policies with e-KYC. The Insurance Regulatory and Development Authority (IRDA) confirmed it recently that the e-KYC services that are stored in the Unique Identification Authority of India (UIDAI) would be considered acceptable by the insurance process. Aadhaar card has become the sole document fir customer identification as that contains all the necessary details for the identification of an individual along with biometric identification. Almost all the insurance giants across the nation are in the process of updating their systems to e-KYC.

How it Works?

Organizations wanting to use e-KYC service will have to get approval and authorization by the UIDAI.

When availing for e-KYC service, individuals have to authorize the Unique Identification Authority of India (UIDAI), by explicit consent, to release identity or address through biometric authentication to the bank.

The UIDAI then transfers the data comprising name, age, gender, and the photograph of an individual, electronically to the bank.

Information thus provided through the e-KYC process is permitted to be treated as an ‘Officially Valid Document' under PML Rules and is a valid process for KYC verification.

Note that information will be pulled from UIDAI only with the consent of the customer.

Authentication will be done through the OTP sent on the registered mobile number. UIDAI server will send OTP to customer's registered mobile. On submitting correct OTP and successful authentication by UIDAI server, the details will be shared.

Now, banks may accept e-Aadhaar downloaded from UIDAI website as an officially valid document.

Which institution can make use of Aadhar eKYC:

• All Recognized Stock Exchanges
• Banks
• Stock Brokers through Recognized Stock Exchanges
• Depository Participants through Depositories
• Association of Mutual Funds in India
• Mutual funds through AMFI
• KYC Registration Agencies (KRAs)

e-KYC Policy - UIDAI(PDF)

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