Know Your Customer, or KYC is the initial stage in establishing a connection between a financial institution and a customer with the goal of preventing fraudulent actions such as money laundering.
This is a series of procedures to verify the customer’s identification before initiating a transaction or using financial services. e-KYC was established and recognized as an appropriate way of KYC verification as digitization replaced otherwise time-consuming processes.
EKYC, which stands for electronic KYC, refers to the digital verification of an identity that does not require face-to-face contacts. The procedure is straightforward, quick, and inexpensive. Let’s take a look at everything there is to know.
What Are the Various Types of eKYC?
There are several ways to obtain eKYC. These are the following:
Aadhaar eKYC online making use of OTP
You can begin your eKYC process online by entering the one-time password (OTP) issued to the mobile number associated with your Aadhaar card. To do so, select ‘Generate OTP’ from the drop-down menu. Enter the OTP to validate your identity and finish the eKYC process.
eKYC aadhaar biometric authentication online
You can also complete your Aadhaar KYC verification electronically by using your biometrics. You must request online eKYC Aadhaar Biometric Authentication while submitting your registration for this.
Aadhaar paperless eKYC offline
Offline Aadhaar eKYC involves the exchange of identification data through XML or QR code. Downloading the Aadhaar offline XML document from the UIDAI website allows you to share it with the financial institution.
The report is encrypted and does not reveal any sensitive information that is irrelevant to the KYC verification agency. You may also share the QR code on your Aadhaar card, which can be scanned to get information about your identity.
Government rules and Aadhar eKYC
In September 2018, the Supreme Court issued a landmark decision in response to Indian residents’ privacy concerns, especially the abuse of Aadhar data by commercial businesses. It prohibited private entities from utilizing Aadhar eKYC for verification.
The next month, the UIDAI permitted Aadhaar eKYC for authentication purposes solely to private entities such as banks for the transmission of direct benefits.
However, the Aadhaar and Other Laws (Amendment) Act, 2019, cleared the path for private businesses to conduct online KYC verification.
According to the legislation, individuals can freely utilize their Aadhaar numbers to authenticate their identities, either through Aadhaar-based online KYC verification or offline eKYC. According to the new guidelines, the UIDAI ensures that private businesses adhere to established safety, security, and privacy requirements.
In addition, the UIDAI would only give a license for KYC verification online if it was essential and convenient. As a result, the new rigorous requirements enable only private businesses that have been certified by the UIDAI to use KYC verification online. This avoids the exploitation of your Aadhaar data.
The following are the steps in the e-KYC process:
- Fill out the form at karvyonline.com.
- Scanned pictures of the papers should be sent.
- Complete the IPV (In-Person Verification) procedure through video call.
- Digitally sign the contract.
- Account registration
Note: In order to establish an account with e-KYC, your mobile number must be registered with Aadhar Records. Aadhaar provides a cost-effective, secure, and adaptable method of authenticating user identification.
What documents do I need for EKYC?
EKYC Online Registration requires the following documents:
- A recent passport photograph
- Personalized check
In India, who must be eKYC compliant?
- Individuals, both residents, and non-residents
- Holders of a joint account
- Guardian of minors with Powers of Attorney (PoA)
- Recipients of Claims (in case of death of original investor)
How do I go about completing KYC online?
When you register an account on any KRA’s eKYC site, you will be asked to provide your personal information. Then you must provide your Aadhaar card number as well as your registered phone number. You will immediately be sent an OTP.
Following verification, you must provide a copy of your self-attested Aadhaar card. After completing KYC online, you may check your status at the KRA’s web page by entering your PAN number.
After learning how to complete KYC online, keep in mind that you may also be KYC compliant through an offline approach. You simply need to obtain the KYC form online from any of the KRAs and submit it to the proper authorities or person along with the required documents.
How do I update my KYC information online?
If you need to update your digital KYC records, such as your name, address, or phone number, you may go to the eKYC portal of your choosing, such as any KRA. You must now click on the ‘Update KYC’ option.
Then, in addition to providing a scanned copy of the revised papers, you must fill out the new data to verify the modifications. You will then be validated using an OTP sent to your registered mobile phone number.
You may now click on submit after you have verified your information. The information will be modified after submission, usually within a week.
As a result, eKYC is a paperless method for meeting the essential KYC standards before beginning your investing journey or startups. If you wish to trade in the stock market, you may quickly complete the KYC obligations using Aadhaar-based eKYC and register a Demat Account as well as a Trading Account.
If you want to invest in mutual funds, keep in mind that, according to SEBI regulations, OTP-based eKYC mutual fund investments are limited to Rs 50,000 per year.
If you wish to invest more, you may use the In-Person Verification (IPV) or Biometrics-based verification processes.
This can also help you to acquire business loans for your startup idea. Keep in mind to always work with a trustworthy and dependable financial partner to get the most out of your assets.
With the greatest Demat Account and a variety of investment programs, Ziploan can assist you in meeting your financial objectives.
Frequently Asked Questions
eKYC is also called Aadhaar-based eKYC as your identity is verified electronically via Aadhar-based substantiation. Thus, Aadhaar-based eKYC provides your proof of identity and address to the service provider instantly, dispensing the need for tedious in-person verification.
Here are how you can apply eKYC online:
1) Fill in the details on karvyonline.com.
2) Submit scanned images of the documents.
3) Complete IPV (In Person Verification) process over a video call.
4) Digitally Sign the document.
5) Account activation.
eKYC simplifies the KYC procedure, making it easy for anyone to begin transacting. No documentation, no paperwork, and no fuss! All you need is your PAN number and Aadhaar to register online. Simply enter these details, verify the information and authenticate yourself through a one-time password (OTP).
Aadhaar based e-KYC (electronic-Know Your Customer) offered by the Unique Identification Authority of India (UIDAI) can be used voluntarily by Aadhaar cardholders as a means to authenticate and establish their identity if they so desire/consent.
It is carried out with the help of an investor’s Aadhaar number. CKYC compliance will allow an investor to transact/deal with all entities governed/regulated by the Government of India/different regulators (RBI, SEBI, IRDA, and PFRDA) without the need to complete multiple KYC formalities.
Following are the documents required for KYC:
2) Voter’s Identity Card
3) Driving Licence
4) Aadhaar Letter/Card
5) NREGA Card
6) PAN Card