All about Aadhaar-based e-KYCFor every service that you might avail, be it an online cab booking, mutual funds or gas connection, you have to go through the Know Your Customer (KYC) process. This could mean getting photocopies of those documents like address proof and identity proof.

The worst part is that this might take up a lot of your time. Why? The physical KYC process involves processes that need your signature and an in-person verification. That means you can’t complete the process in the comfort of your home.

This is precisely the reason why the government introduced the e-KYC or electronic KYC process. This process is Aadhaar based. So, you need your Aadhaar number if you want to opt for e-KYC instead of the physical KYC.

What is e-KYC?

e-KYC is a completely paperless process of submitting your KYC documents to the service provider. You will need only your Aadhaar number and your mobile number to complete the e-KYC process.

How is this different from physical KYC?

When you go for a physical KYC process, you will be asked to submit an attested copy of your address proof and identity proof. Your mobile number and your email address need to be verified. Once these are done, you will have to go to a centre of the service provider so that they can verify your identity in person. What about e-KYC? Just have your Aadhaar number and mobile number on hand and your e-KYC will be done in minutes.

What are the advantages of e-KYC?

The biggest advantage is that there is no paperwork involved. Everything is completely online. The risk of forgery is minimised. When you make copies of your documents and submit them, there are many chances of your details getting misused. You, of course, will be able to complete the e-KYC process almost instantly unlike the physical KYC process that might take days. Also, without going anywhere you can complete the KYC process in the comfort of your home.

Where to use e-KYC?

Thought that e-KYC is only for opening bank accounts? That’s not true. There are a number of service providers that provide the e-KYC facility. Some of them are listed below.                      

  • Mutual fund houses
  • Stockbrokers/stock trading companies
  • Insurance firms
  • Gas/LPG service providers
  • Indian Railways
  • Stock exchanges
  • KYC registration centres

The process

The e-KYC process is pretty straightforward. First, you need to get your Aadhaar number if you don’t have one. Go to the service provider’s app or website. Enter your Aadhaar number and your mobile number. You will receive a one time password (OTP) on your mobile number. Enter the OTP on the service provider’s app or website. You will be given an option to upload your specimen signature. You can skip it if you don’t want to give your signature. Give your consent to your service provider so that they can access your Aadhaar details from the central data repository of the Unique Identification Authority of India (UIDAI).

The service provider will authenticate your details based on the data retrieved from the repository. Your details such as residential address will get populated. Give your consent for verification of these details. Your e-KYC is done. Some service providers might require video verification before the e-KYC process is completed. This is called Electronic In-Person Verification (EIPV). You can do this at home. Once your e-KYC is complete, you will receive a confirmation on your email. You can also check the status of your e-KYC online. If you want to complete e-KYC for making mutual fund investments, you might be asked to sign a pdf of the application form using an OTP.

The restrictions

Even though there are no restrictions for most service providers, the Securities Exchange Board of India (SEBI) has laid down some rules for mutual fund investments. What’s that? This rule says that you can invest up to Rs 50,000 per year per mutual fund house if you have done only your e-KYC. What if you want to invest more? You will have to get your biometric verification done at the fund house.

The next time you are asked to submit KYC documents, ask your service provider if they have e-KYC. You can save a lot of time and effort

Staff Writer

This article is written by RupeeIQ editorial staff.