eKYC stands for Electronic Know Your Customer. It is a system used to identify and register users by gathering personal and professional information. It is an extension of the traditional KYC procedure. The main difference between the two is that eKYC can be processed online and is a much easier option for submitting documents and forms.
What is eKYC?
The eKYC system was developed with a view to registering a user without involving a lot of paperwork and documentation. Also, the time taken during the physical registration under a traditional KYC is a lot less in the case of eKYC. The Authentication is done through your Aadhar Card; therefore, this system is also known as Aadhar-based eKYC. Essentially, eKYC is a no-cost alternative to traditional user verification.
Advantages of eKYC
The eKYC system cuts costs and makes the client authentication process a lot more transparent for banks and financial institutions. It has made it possible for people to submit essential documents and other information while sitting comfortably in their homes.
Following are the three main benefits of the eKYC system of user registration.
- No Paper Trail: While applying for a loan or even opening a bank account, KYC is the first requirement by the concerned bank. This may be a simple process but requires the user to physically visit the bank’s brand to submit information and documents. It can be difficult for some people to collect all the hard documents and compile them accurately. eKYC eliminates this problem by allowing people to submit KYC documents online. This way, this entire process has become paperless and much more efficient.
- Cost-Effective: Under traditional KYC, the bank has to incur costs in inventory and workforce. The traditional KYC procedure takes place between the user and the bank’s representative. To ensure every detail is accurate and complete, the bank has to hire a team of people to verify the user’s information. With eKYC, everything is done online. It saves the cost and effort of both the parties involved. Also, eKYC can be completed 24×7, and the customer does not have to move an inch.
- Safe and Secure: The most important benefit of eKYC is that it is completely safe and secure. All the documents and information regarding your finances would not be misplaced by the bank, the possibility of which is quite high under traditional KYC. Everything would be safeguarded because of being online, and the data would not be shared or tampered with by anyone. The chances of losing or damaging important paperwork are also eliminated through eKYC.
- Extremely Fast: Online registration and Authentication require much less time than traditional KYC. eKYC is much faster as all the formalities are completed online instead of physically visiting the branch to submit documentation.
eKYC documents are submitted online, and this makes this process extremely streamlined. Online submission of documents ensures that every required piece of documents is duly registered and nothing is missing. Documents are also much safer as they cannot be destroyed or lost during their upload online.
The following documentation is required at the time of eKYC.
- Passport-sized photographs
- Personalized cheque
- Documents used as proof of identity: Aadhar Card, PAN card, passport, and Voter’s ID.
- Documents of proof of address such as Aadhar Card, Voter’s ID, Driving License.
- In the case of a minor, the person operating the account has to submit identity proof.
- In the case of NRIs, the following documents must be submitted:
- Passport attested by the Foreign Office, Notary Public, and the Indian Embassy
- Residential Visa attested by the Foreign Office, Notary Public, and the Indian Embassy
eKYC consists of a process that is extremely easy compared to traditional KYC. Traditional KYC needed a lot of time to complete. The eKYC process is instant and saves time. The process involves the following steps:
- The first step would be to visit the website of a well-known and secure KRA. You have to register yourself if you are applying for a loan or opening an account.
- Go through the application process and create an account by entering a few personal details.
- The next step would be to enter your Aadhar number and receive an OTP on your registered mobile number.
- It is the time when you have to submit the documents required for eKYC. Check the list given on the portal and make sure you have scanned copies of the documents. Al self-attested copy of your e-Aadhar is also submitted along with other documents. Upload all the necessary documents online, one by one.
- After uploading the documents online, the site would require an in-person verification. This would be conducted over a video call. The representative would ask you a couple of basic questions essential to confirm your identity.
- Now, you would be required to digitally sign the document. It can take KRA up to 7 days to approve your registration.
The basic requirement to be eligible for an eKYC is a valid Aadhar number. It is because, in India, the Aadhar number is the basis of customer registration. Without a valid Aadhar card, you cannot register yourself in any kind of Government-run facility or provision.
For an Aadhar card, you can contact the Unique Identification Authority of India (UIDAI). The Aaadhar card will be issued to you after accurate authorization from government agencies.
In conclusion, the eKYC process is a way to submit all your documents online. With a single click, you can perform all the formalities in minutes. This is a safe and secure way to handle your important personal and professional documents.
1. Why do I need to mention my mobile number at the time of registration?
You will receive the OTP on your mobile number to confirm your registration.
2. Who is eligible for doing eKYC through Aadhar Card?
Anyone who has not completed their KYC can do eKYC through Aadhar Card.
3. Is a PAN card necessary for eKYC?
Yes, a PAN card is necessary for eKYC.
4. Is eKYC completely paperless?
Yes, the eKYC process is completely paperless and 100% online.
5. Is an in-person verification necessary?
Yes, you have to do an in-person verification at the time of registration.
6. What do I do if I do not receive the OTP?
If no OTP is received, the website will generate another OTP by clicking on the ‘Resend OTP’ option.
7. What is the investment limit for an Aadhar-based eKYC?
There is no limit to how much you can invest under an Aadhar-based eKYC.
8. Is there an option to complete eKYC through n offline mode?
Yes, you can also do an offline eKYC.
9. Are NRIs eligible to do eKYC?
To be eligible for eKYC, NRIs should have lived in India for 182 days in the year preceding the enrolment date on their Aadhar Card.
10. What is meant by eSign?
eSign is an electronic signature that allows the user to sign documents digitally.
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