RBI approves DigiLocker; now open bank, loan accounts by showing digital documents

The issued e-documents in DigiLocker system are deemed to be at par with original physical documents and are accepted in KYC process after RBI’s recognition

Kumar Shankar Roy Jan 11, 2020

RBI approves DigilockerYou can now open a bank account or a loan account with financial institutions by showing them digital documents, removing the hassle of carrying hardcopy and getting them verified/attested. DigiLocker, Government of India’s cloud-based platform for issuance and verification of documents & certificates digitally, has got a shot in the arm with central bank Reserve Bank of India officially recognising the DigiLocker platform and its digital documents. The banking regulator’s latest master circular on KYC (Know Your Customer) says e-documents issued by the issuing authority to a customer’s digital locker account will be now accepted in the KYC process by financial companies.

DigiLocker is a flagship initiative of Ministry of Electronics & IT (MeitY) under Digital India programme. DigiLocker aims at ‘Digital Empowerment’ of citizen by providing access to authentic digital documents to citizen’s digital document wallet.

The issued documents in DigiLocker system are deemed to be at par with original physical documents as per Rule 9A of the Information Technology (Preservation and Retention of Information by Intermediaries providing Digital Locker facilities) Rules, 2016 notified on February 8, 2017 vide G.S.R. 711(E).

The RBI has effected some changes due to amendments to the PML Rules and one of them is about e-documents. “Equivalent e-document has been defined in Section 3 as an electronic equivalent of a document, issued by the issuing authority of such document with its valid digital signature including documents issued to the digital locker account of the customer as per Rule 9 of the Information Technology (Preservation and Retention of Information by Intermediaries Providing Digital Locker Facilities) Rules, 2016,” says an RBI communique, which has also permitted video-based KYC for banks and fintechs.

Additional Read: Video-based KYC allowed for banks and fintechs to onboard customers remotely

As per RBI’s KYC directions, a customer, for the purpose of Customer Due Diligence CDD) process, shall submit Aadhaar number, or proof of possession of Aadhaar number, or any Officially Valid Document (OVD) or the equivalent e-document thereof containing the details of his identity and address; and the Permanent Account Number or the equivalent e-document thereof or Form No. 60 as defined in Income-tax Rules, 1962. Equivalent e-document has also been permitted for accounts of non-individual customer, RBI says.

DigiLocker provides a host of benefits to citizens like access to important documents anytime, anywhere, authentic documents deemed legally at par with originals, digital document exchange with the consent of the citizen and faster service delivery while accessing government benefits, employment, financial inclusion, education, health etc. At present, DigiLocker has 33.99 million registered users and 3.73 billion issued authentic documents. Issued documents are e-documents issued by various government agencies in electronic format directly from the original data source and the URL of these documents is available in the issued documents section of DigiLocker.

At present, numerous Government departments, agencies or states accept DigiLocker. The Ministry of Finance (Department of Revenue) accepts e-documents from DigiLocker as part of Prevention of Money Laundering Act (PMLA) Guidelines. The Ministry of Civil Aviation (Bureau of Civil Aviation Security) accepts photo Identity documents from DigiLocker account of the departing air passengers. The Indian Railways accepts digital Aadhaar and driving licence from Digital Locker as proof of identity of passengers for undertaking journey by train. The Ministry of Road Transport and Highways (MORTH) accepts DL, registration certificate or other documents presented through DigiLocker.

Additional Read: Aadhaar based e-KYC back for MFs, but the Nilekani Commitee suggests a better way to sidestep this process


Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. Kumar is a financial journalist, with a functional experience of 15 years. He tracks mutual funds, insurance, pension, PMS, fixed income/debt and alternative investments markets closely. He has worked for The Times of India, The Hindu Business Line, Deccan Chronicle Group, DNA, and Value Research, among others, across different cities in India. He is deeply interested in marrying data insights with actionable opinion. He can be contacted at kumarsroy@rupeeiq.com.

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