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What is eKYC?
eKYC full form is electronic know-your-customer, and it is a regulatory policy that has been established and implemented around the world to combat identity theft, fraud, and money laundering.
Before making a transaction or accessing financial services such as account opening, mutual funds, business loans, etc; it is required to authenticate the customer’s identity through eKYC. As digitization replaced otherwise time-consuming methods, e-KYC was formed and acknowledged as an appropriate method of KYC verification.
Details about the customer, as well as photocopies of legitimate government identity proofs, are collected and recorded in a database using a KYC form. The customer only needs his or her Aadhar card and no other identification. This eliminates the necessity for in-person verification and avoids the trouble of carrying a stack of documents.
eKYC Eligibility
To be eligible for an eKYC, you must have a valid Aadhar number. It’s because, in India, customer registration is based on the Aadhar number. You cannot enroll for any government-run service or provision unless you have a valid Aadhar card.
You can get an Aadhar card from the Unique Identification Authority of India (UIDAI). After accurate authorization from government agencies, the Aadhar card will be issued to you.
How does eKYC work?
Its goal is to use the internet to accomplish paperless identity verification. The Aadhar platform is used to verify the authenticity of a person’s identification.
The information submitted through the e-KYC process can be treated as an ‘Officially Valid Document,’ and it is a valid process for KYC verification. Individuals must specifically authorize the Unique Identification Authority of India (UIDAI) to retrieve their identity or address through biometric authentication as well as OTP authentication while using the e-KYC online service.
When using the Biometrics method, you need to provide your 12-digit Aadhaar number as well as biometrics such as fingerprints or iris scans.
When the authorization is done using an OTP, you simply submit your Aadhaar number, after which an OTP will be delivered to your registered mobile phone, completing the transaction.
The UIDAI then electronically sends the data to the registered organization, which includes an individual’s name, age, gender, and photograph.
It’s important to note that information from UIDAI will only be accessed with the customer’s permission.
eKYC Documentation
Following is the list of documents required during the eKYC process:
1.Identity proof: Registered Aadhar card or PAN Card
2.Linked mobile number
Verification options using eKYC
Electronic or digital KYC comes in a variety of formats that can be used according to the situation and requirements. It uses Optical Character Recognition (OCR), which reads, analyses, and verifies data using biometric information. Digital KYC can be accomplished in one of two ways:
- Video-based eKYC: A representative will check the customer remotely via video call in the video-based eKYC process. PAN, Aadhar, and a physical signature drawn on plain white paper are all promptly cross-checked and authenticated. This process takes 5 minutes and can be completed online without the customer’s physical presence.
- Image-based eKYC: This type of eKYC involves cross-checking the customer’s image across a variety of documents.
Advantages of eKYC
For banks and financial organizations like NeoGrowth Credit Pvt Ltd., the eKYC system reduces costs and makes the client authentication procedure more transparent. It has enabled users to submit important documents and other information from the convenience of their own homes.
1. No Paper Trail:
KYC is the initial requirement of the concerned bank when asking for a loan or even opening a bank account. This may appear to be an easy process, but it needs the user to submit information and papers in person at the bank’s location. It can be tough for some persons to gather all the documents and appropriately compile them. By allowing people to submit KYC documents online, eKYC solves this difficulty. This method has made the entire procedure paperless and considerably more efficient.
eKYC is a paperless system that eliminates the need for paper-based document management. By becoming eco-friendly and adopting a cloud-based internet system, a firm, state, or country can reduce their carbon footprints. Going paperless not only helps to conserve the environment, but also helps to reduce the costs involved with standard KYC compliance.
2. Consent based:
Individuals who require service or utility must file for eKYC on their own initiative and with their consent. This safeguards an individual’s right to privacy, which is a basic right guaranteed by our constitution. eKYC also eliminates the possibility of losing or damaging crucial papers.
3. Extremely Quick:
The eKYC service is fully automated and available online. This means that KYC data can be sent in real-time without any manual intervention. The paper-based KYC process can take days or weeks to complete, but the eKYC process only takes a few minutes to complete. Compared to traditional KYC, online registration and authentication take much less time. Because all the formalities are completed online rather than physically visiting the branch to submit papers, eKYC is substantially faster.
4. Transactions Or Usage Transparency:
By abusing their position, bank staff, private agents, unregulated sim card providers, and others may grant favors to known accomplices, relatives, and friends. All records and data are permanently saved online with eKYC. Any misappropriation, illegitimate gain, or unlawful behavior can be traced back to the person or parties involved in such transactions or service usage
Conclusion
Finally, the eKYC procedure allows you to submit all your paperwork online. You may complete all the eKYC formalities in minutes with just one click. This is a safe and secure method of storing and managing your crucial personal and professional papers.
