e-KYC: Benefits, Process, Role of Bank
e-KYC (Electronic Know Your Customer) Features
When someone want to open bank/mutual fund & other account, the biggest challenge faced is submission of multiple documents such as address proof, ID proof and others. But Ministry of Finance, Government of India has given their approval for paperless authentication or eKYC.
What is eKYC
- eKYC service is offered by UIDAI and it’s main objective is for the verification of his/her credentials digitally
- Aadhar card holders can now get following personal details verified at various organizations while applying for new account:
- ID & Address Proof
- E-mail Address
- Mobile Number
3. This way, paper documents which had traditionally been mandatory for verification won’t be required saving time, efforts and cost of bank employees and customers.
What customer needs to do:
In order to free themselves from carrying hard copy of required documents everytime; Aadhar card holders will have to give their consent to the banks banks to access their data from UIDAI’s Central Data Repository.
How banks will verify customers electronically
- Organizations wanting to use eKYC service will have to get approval and authorization by UIDAI
- For verification, these organizations will have to use biometric scanning devices approved by Unique Identification Authority of India (UIDAI) and register the device with UIDAI so that data can be accessed through the device
- These organizations will then need just the unique Aadhar identification number and then scan fingerprints of the customers through biometric readers.
- This will fetch customer details such as – full name, address, date of birth, mobile number, gender and photograph and will also access and copy all the KYC documents from the UIDAI servers and save electronic copy of all the documents for opening the account in their database for future use.
- Once these details are verified, accounts will be opened instantly which otherwise takes atleast a week.
- As of now, the device is offered at no cost.
- Data would be accessed online in a highly secured environment.
Which organizations make use of Aadhar eKYC
As of now, following financial service providers are using eKYC facility while opening new accounts:
- Fund houses
- Trading Account
- Insurance companies
As time progresses, Aadhar eKYC will make every Indian’s life hassle free as overall processing will become easy.