Ekyc India: Everything You Need to Know About e-KYC and Its Application

e-KYC, or electronic Know Your Customer, is a game-changer in India's financial sector. It's a digital process that verifies an individual's identity using their Aadhaar number.

The e-KYC process is fast, secure, and convenient. It can be completed in just a few seconds, making it an ideal solution for businesses and individuals alike.

In India, e-KYC is governed by the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016. This law mandates the use of Aadhaar for authentication purposes.

e-KYC is a digital process that allows individuals to verify their identity using their Aadhaar card information. This process is made possible through the use of biometric data, such as fingerprints and iris scans.

The Aadhaar Act of 2016 mandated the use of e-KYC for verifying identities, making it a crucial component of India's digital infrastructure. This has led to a significant increase in the adoption of e-KYC across various industries.

e-KYC is not just limited to government services, but is also used by private companies to verify customer identities. The Unique Identification Authority of India (UIDAI) is responsible for implementing and regulating e-KYC in the country.

The e-KYC process is highly secure, with multiple layers of authentication and encryption to protect sensitive information. This has helped to build trust in the digital identity verification process among citizens.

e-KYC in India offers three types of verification methods: OTP-Based, Biometric-Based, and Offline e-KYC.

The OTP-Based method sends an OTP to your registered mobile number after entering your Aadhaar number, allowing you to complete verification without sharing physical or biometric data.

Biometric-Based e-KYC requires providing your Aadhaar number and biometric data, which are matched with the UIDAI database for secure verification. Offline e-KYC involves downloading a digitally signed XML file with your details from UIDAI.

Here are the three types of e-KYC methods in India:

e-KYC is a digital process that makes it easier for customers to verify their identity with financial institutions. This process involves several steps.

Preliminary verification is the first step in the e-KYC process, where the customer's Aadhaar eKYC and PAN verification is checked to ensure the initial data matches their identity.

During a live video call, the customer is required to show their original identification documents on camera for verification. The representative checks the customer's face against the photo in their provided documents to ensure authenticity.

The system uses liveness detection technology to ensure the customer is physically present and interacting with the representative during the video call. This is a security measure to prevent impersonation.

The location of the customer is geotagged during the call to ensure they are within the geographical boundaries allowed by the financial institution.

Here's a summary of the e-KYC process:

After the call, another representative reviews the recorded video and captures data for additional verification. Once approved, the customer's KYC is marked as complete.

Verification is the backbone of e-KYC, ensuring that the process is secure and reliable.

There are three types of e-KYC: OTP-Based, Biometric-Based, and Offline e-KYC.

OTP-Based e-KYC sends an OTP to your registered mobile number, which you can use to complete verification without sharing physical or biometric data.

Biometric-Based e-KYC requires you to provide your Aadhaar number and biometric data, which are matched with the UIDAI database for secure verification.

Offline e-KYC allows you to download a digitally signed XML file with your details from UIDAI, which you can use for KYC.

The benefits of e-KYC include instant results, cost-effectiveness, reduced fraud risk, and authorization needed for data access.

Here are the benefits of e-KYC in detail:

Types of e-KYC in India can be categorized into three main types.

OTP-Based e-KYC is a convenient option where you enter your Aadhaar number, and an OTP is sent to your registered mobile to complete verification.

Biometric-Based e-KYC requires providing your Aadhaar number and biometric data, such as fingerprints or iris scans, which are matched with the UIDAI database for secure verification.

You can also opt for Offline e-KYC, where you download a digitally signed XML file with your details from UIDAI to use for KYC verification.

Here are the three types of e-KYC in India:

In the digital age, e-KYC has become more efficient and convenient. Digital KYC is a paperless method that requires an official representative to be physically present with the customer.

This representative captures live images of the customer and their documents, which are geotagged and verified in real time. The Digital KYC data is then cross-checked against the customer's application details.

The mutual fund industry is using video-recording-based manual KYC extensively, which involves customers submitting Proof of Identity and Proof of Address, and recording a video via an app or web portal.

This process takes care of the In-Person Verification (IPV) mandated by SEBI and RBI, while also saving on operational costs associated with paper-based KYC.

There are three main types of e-KYC in India.

OTP-Based e-KYC is a convenient option that allows you to verify your identity using a one-time password (OTP) sent to your registered mobile number. This method eliminates the need for physical or biometric data.

Biometric-Based e-KYC requires you to provide your Aadhaar number and biometric data, such as fingerprints or iris scans, which are then matched with the UIDAI database for secure verification.

Offline e-KYC involves downloading a digitally signed XML file with your details from the UIDAI website, which can be used for KYC purposes.

Here are the three types of e-KYC in India:

The benefits and advantages of eKYC in India are numerous and significant. eKYC is fast, typically taking less than a few minutes to complete, making it a convenient option for customers.

One of the key benefits of eKYC is that it is cost-effective, with the verification process being free of charge. This eliminates the need for customers to pay for physical document submissions and in-person visits.

eKYC also reduces the risk of fraud, as it uses secure digital methods like fingerprints or eye scans, making forgery difficult. Additionally, customers' approval is required for eKYC, ensuring that their information is only accessed with their consent.

Here are some of the key benefits of eKYC:

The benefits of e-KYC are numerous and significant. It's a fast process, typically taking less than a few minutes to complete.

One of the most notable benefits is the cost-effectiveness of e-KYC. The verification process is free of charge, making it a convenient option for individuals.

Another advantage of e-KYC is the reduced risk of fraud. The process uses secure digital methods like fingerprints or eye scans, making forgery difficult.

In addition to these benefits, e-KYC also requires authorization from the individual, ensuring that only authorized parties have access to their information.

The process is also highly secure, using encrypted data transfers to protect the customer's identity and personal information.

e-KYC has also made it possible for customers to complete the process from the comfort of their own homes or anywhere else, without needing to visit a branch.

Here are some of the key benefits of e-KYC:

cKYC, or centralized KYC, has also brought several benefits, including the ability to undergo the KYC process only once for multiple products. This reduces redundancy and saves time and resources for financial institutions.

With cKYC, institutions can also ensure compliance with the latest regulations, as the central registry is regularly updated.

Video KYC has revolutionized the way we complete our Know Your Customer (KYC) processes. It's a game-changer for those living in remote areas or with busy schedules, as it allows them to complete their KYC from the comfort of their own homes.

The convenience of Video KYC is hard to beat. By eliminating the need for in-person visits, financial institutions can significantly reduce the time required to complete the verification process.

With Video KYC, customers can complete their KYC in no time, making it a faster onboarding process for financial institutions. This is a major advantage, especially for those who value their time.

The RBI has officially approved Video KYC as a fully compliant method for customer verification. This means that all guidelines are adhered to without compromising security.

By reducing the need for physical document submissions and in-person visits, financial institutions can save a significant amount of money. This is a cost-effective solution that benefits both parties.

In India, the Know Your Customer (KYC) regulations are governed by the Reserve Bank of India (RBI) and the Prevention of Money Laundering Act (PMLA).

The RBI has mandated that all financial institutions in India must comply with the KYC norms to prevent money laundering and terrorist financing.

The KYC process in India involves verifying the identity of customers through various documents, including government-issued IDs, proof of address, and passport.

The RBI has categorized customers into three risk profiles based on their transaction volumes and sectors. These categories determine the frequency of Re-KYC updates.

High-risk customers, who typically engage in high-value transactions or operate in sectors with elevated risks of fraud, must undergo Re-KYC every 2 years. This is a crucial measure to ensure their activities are legitimate.

Medium-risk customers, who pose moderate risks, must update their Re-KYC every 8 years. This category includes small businesses or individuals with moderate transaction volumes.

Low-risk customers, who have minimal financial activities, such as retirees or individuals with low transaction volumes, must update their Re-KYC every 10 years.

Here's a summary of the risk categories and their corresponding Re-KYC intervals:

Re-verification is a crucial process that helps maintain the security and compliance of financial systems. Re-KYC, or re-verification of Know Your Customer, is required to keep customer details updated.

Customer information can change over time, and institutions must periodically verify and update customer data to maintain compliance with Anti-Money Laundering (AML) guidelines. This ensures the safety of the financial system.

Regular updates help prevent fraud by reducing the risk of misuse of accounts. By keeping customer details updated, financial institutions can prevent unauthorized transactions or identity theft.

Financial institutions must adhere to RBI regulations, which specify regular intervals for updating KYC details depending on the customer’s risk profile. This helps maintain compliance with AML guidelines.

Regular re-verification also enhances customer safety by protecting them from unauthorized transactions or identity theft. This is especially important for high-risk customers who require more frequent updates.

Here are the benefits of re-verification in a nutshell:

The eKYC process in India is facilitated by the Unique Identification Authority of India (UIDAI), which provides the necessary infrastructure to make it work.

The eKYC process in India leverages digital systems to verify a customer's identity based on their Aadhaar number, making it quicker and more convenient.

To initiate the eKYC process, a customer's Aadhaar number is used to authenticate their identity.

The eKYC process in India is a paperless and efficient alternative to the traditional KYC process.

It leverages digital systems to verify a customer’s identity based on their Aadhaar number, making it quicker and more convenient.

The Unique Identification Authority of India (UIDAI) provides the infrastructure to facilitate eKYC.

To obtain Aadhaar Paperless Offline e-KYC data, Aadhaar number holders can use the following channels.

Gender is one of the details that can be obtained through this process, and it's classified as either “M” (Male), “F” (Female), or “T” (TransGender).

The eKYC process saves customers from a lot of hassle and also helps conserve nature by being paperless.

The Re-Process is a crucial step in keeping your financial information up to date.

Customers receive a notification from their financial institution when their KYC details are due for an update.

These reminders are sent via email, SMS, or other registered communication channels.

Once the updated documents are submitted, the institution processes the new KYC details within 10 days.

For low-risk customers, many banks offer a digital Re-KYC option through Internet Banking, mobile apps, or ATMs.

In India, the Know Your Customer (KYC) process requires customers to submit specific documents to verify their identity and address. These documents help financial institutions ensure the legitimacy of the individuals or businesses they are engaging with.

For individual customers, the RBI has specified a set of Officially Valid Documents (OVDs) that can serve as both Proof of Identity (POI) and Proof of Address (POA). These documents include Aadhaar Card, Passport, Voter ID Card, Driving Licence, and PAN Card.

If any of the submitted documents contain both identity and address details, additional documentation is not required. However, if the Proof of Identity document does not include the customer's address, a separate Proof of Address must be submitted.

Here is a list of Officially Valid Documents (OVDs) for individual customers:

Physical documentation is a traditional method of verification that requires a customer's physical presence at a bank or financial institution.

The customer submits self-attested copies of documents like Proof of Identity (POI) and Proof of Address (POA), which are then cross-verified against the details submitted in the customer's application form.

This method is time-consuming, as it requires manual document verification.

The customer must physically visit the bank or financial institution to complete the verification process.

In India, the Know Your Customer (KYC) process requires customers to submit specific documents to verify their identity and address. The RBI has outlined various types of KYC processes that are compliant with regulations.

For individual customers, the required documents may vary depending on the type of customer. Depending on the type of customer—individuals, minors, non-resident Indians (NRIs), or businesses—the required documents may vary.

Individual customers can use various documents as Proof of Identity (POI) and Proof of Address (POA), including Aadhaar Card, Passport, Voter ID Card, Driving Licence, and PAN Card. These documents are widely accepted and can serve as both POI and POA.

If a submitted document contains both identity and address details, additional documentation is not required. However, if the Proof of Identity document does not include the customer’s address, a separate Proof of Address must be submitted.

Here's a list of Officially Valid Documents (OVDs) that can serve as both POI and POA for individual customers:

If you have an Aadhaar number, you can use the Aadhaar Paperless Offline e-KYC system. This system allows you to download your Offline XML.

If you downloaded your Offline XML before June 18, 2019, you can obtain a Certificate from the official website.

If you've downloaded Offline XML before June 18, 2019, you can get a Certificate from the UIDAI website.

There are three types of e-KYC in India: OTP-Based e-KYC, Biometric-Based e-KYC, and Offline e-KYC.

Offline e-KYC allows you to download a digitally signed XML file with your details from UIDAI and use it for KYC.

You can complete OTP-Based e-KYC by entering your Aadhaar number and using the OTP sent to your registered mobile to verify your identity.

Biometric-Based e-KYC requires you to provide your Aadhaar number and biometric data, which are matched with the UIDAI database for secure verification.

Here are the benefits of e-KYC:

To validate an Aadhaar Paperless Offline e-KYC XML, you first need to unzip it using a standard utility like WinZip or 7Zip, entering the "Share Phrase" as the password.

The next step is to parse the XML, which involves using the logic mentioned earlier to validate the digital signature.

You'll also need to do optional OTP validation against the mobile number, which requires the Aadhaar number holder to provide their mobile number that can be hashed and verified against the KYC data.

Face validation can also be done by capturing a face and matching it against the photo within the e-KYC XML.

The cKYC registry integrates with PAN databases to provide a more comprehensive KYC process.

By linking your PAN details, you can further streamline your verification process, as these numbers are linked to the centralised KYC record.

Identity verification is a crucial aspect of identity and access management (IAM). Gartner Research provides valuable insights on this topic, which can help you make informed decisions when choosing a partner.

Identity document verification is a key component of IAM. Explore the details of identity document verification to understand its importance in the IAM process.

Gartner Research suggests that IAM leaders should ask potential partners specific questions to ensure they are getting the right solution for their needs.

India has a robust regulatory framework for Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.

The Reserve Bank of India (RBI) has issued guidelines for KYC, which include the use of Aadhaar, a unique identification number issued to Indian citizens, as a valid proof of identity.

The RBI also requires financial institutions to verify the identity of customers through various means, including physical verification and electronic verification.

The government of India has also made it mandatory for all entities to comply with the Prevention of Money Laundering Act (PMLA) and the Financial Action Task Force (FATF) recommendations.

India has a complex history with Know Your Customer (KYC) regulations. The Prevention of Money Laundering Act (PMLA) of 2002 introduced KYC in India, with regulators like the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), and Insurance Regulatory and Development Authority (IRDA) interpreting the rules further.

Historically, Indians had a range of government IDs, called officially valid documents (OVDs), making it easy to create multiple ID cards and confuse law enforcement. To address this issue, the government launched "Aadhaar", a 12-digit number issued to all residents of India.

Aadhaar was designed to eliminate duplicate and fake identities and could be verified and authenticated in a simple and cost-effective way. The Indian government mandated Aadhaar-based eKYC for all by changing the PML Rules.

In 2018, the Supreme Court overturned this aspect of the PML Rules, stating that one didn't always need to have an Aadhaar number to prove identity. The government later amended the Aadhaar act to allow banks, telecom, and other financial services providers to perform "voluntary" eKYC.

To register for e-KYC, you can visit the official website of a SEBI-licensed KRA (Know Your Customer Registration Agency) and follow these steps:

The new PML rules have introduced Aadhaar-based eKYC, allowing financial service providers to verify Indian consumers' identities electronically, reducing paperwork and time spent.

This electronic verification process can be done in seconds, a significant improvement from the five to seven days required for manual verification.

Using Aadhaar for KYC has raised concerns about data privacy, as it provides financial service providers with additional personal information about their customers.

To mitigate this risk, the UIDAI recommends only sharing the minimum relevant information necessary with third parties, without exposing customers' personal information.

In India, the Supreme Court's verdict has made a legal framework on eKYC and data protection a necessity. This framework will enable third-party use of biometric data.

Most developing countries, including India, lack comprehensive legal frameworks on the usage and protection of biometric data collected by third-party users. This lack of regulation hinders the adoption of eKYC.

A legal framework on eKYC and data protection will ensure that biometric data is used and protected correctly. This will increase trust in digital identity verification.

With a legal framework in place, companies can quickly and seamlessly sign up customers and start delivering their products and services to the Indian market.

The main difference between Aadhaar eKYC and offline Aadhaar is that eKYC is an API-based solution that accesses the UIDAI database directly, while offline Aadhaar doesn't access the database directly and goes through an XML file download process.

Offline Aadhaar requires a customer to visit the UIDAI website and enter an OTP to get access to a password-protected, digitally signed XML packet, which contains demographic details like name, address, photo, and more.

The XML packet can then be shared with the organization or agency trying to verify the customer. This digital signature from UIDAI allows the service provider to verify its authenticity.

Here's a comparison of the two methods:

The future of eKYC in India looks promising. Regulators like SEBI have already given their consent to video-based KYC solutions.

Financial institutions can reduce costs and increase adoption of eKYC by performing remote KYC. This is particularly beneficial in India, where financial inclusion is a massive problem.

Multiple large enterprises are already implementing or adopting video-based KYC solutions for their customer onboarding needs.

Video-Based e-KYC is a convenient and secure way to verify customer identities. Introduced during the COVID-19 pandemic, it allows customers to undergo a live video call with a representative from a financial institution.

The customer's identity and documents are verified over the video call, and the representative captures live images of the Proof of Identity and Proof of Address documents. The RBI has deemed this mode of KYC to be fully compliant with regulations.

The process involves preliminary verification, live video call, liveness detection, face and document matching, geotagging, and a review process. This ensures that the customer is physically present and interacting with the representative during the video call.

The benefits of Video-Based e-KYC include convenience, faster onboarding, regulatory compliance, and cost-effectiveness. Customers can complete their KYC from the comfort of their homes without visiting a branch, and financial institutions can reduce operational costs.

Here are the key benefits of Video-Based e-KYC:

Video KYC is a game-changer for customer verification. It's a secure and convenient way to complete KYC from the comfort of your own home.

Before the video call begins, a preliminary verification check is done to ensure the initial data matches the customer's identity. This includes Aadhaar eKYC and PAN verification checks.

The live video call is where the magic happens. The representative verifies the customer's Proof of Identity (POI) and Proof of Address (POA) by asking them to show their original identification documents on camera.

Liveness detection technology is used to ensure the customer is physically present and interacting with the representative during the video call. This adds an extra layer of security to prevent any potential fraud.

The representative checks the customer's face against the photo in their provided documents to ensure authenticity. Optical Character Recognition (OCR) may also be used to extract and verify details from the documents.

Video KYC is not just convenient, but also faster and cost-effective. It eliminates the need for physical document submissions and in-person visits, reducing operational costs for financial institutions.

Here are the benefits of Video KYC:

Video ID is an online verification process that confirms a customer's identity over a live video call. It's a convenient option that eliminates the need for in-person visits to branches.

This method is similar to Video KYC, which is also an online, real-time verification process. Video KYC is used by banks and financial institutions to confirm a customer's identity over a live video call.

By using Video ID, customers can have their identity verified remotely, making it a more accessible and efficient option.

Online Services offer a convenient way to verify your identity, and two popular methods are used by banks, digital wallets, and financial services.

One-Time Password (OTP) is sent to your Aadhaar-linked mobile number, and once you enter it, the KYC service provider retrieves your identity data from the UIDAI database for verification.

Biometric-Based eKYC uses your fingerprint or retina scan for authentication, and if it matches, the KYC provider fetches your information from the UIDAI database.

These methods are efficient and quick, making it easy to complete your online eKYC.

Here are the two methods of Online eKYC:

In India, e-KYC (electronic Know Your Customer) has become a game-changer for identity verification. e-KYC is a digital process that allows you to verify your identity without the need for physical documents or biometric data.

There are three types of e-KYC: OTP-Based e-KYC, Biometric-Based e-KYC, and Offline e-KYC. OTP-Based e-KYC is the fastest, typically taking less than a few minutes to complete.

With e-KYC, you can have your identity verified and authenticated without any cost. This is because the verification process is free of charge. You can even verify your identity offline, without needing an internet connection.

Offline e-KYC provides a way for customers to verify their identity without needing an internet connection or real-time access to UIDAI's database. You can download your Aadhaar XML file, which contains your demographic information, from the UIDAI portal.

Here are the three types of e-KYC:

The organization requesting your details can only access your information from UIDAI once you give consent, either through a one-time password (OTP) or biometric verification. This ensures that your identity is secure and protected.

Registration and Enrollment is a crucial step in getting started with e-KYC in India. To begin, you'll need to apply online for e-KYC through a SEBI-licensed KRA (Know Your Customer Registration Agency) website.

You can find the official website of a KRA by searching online. Once you're on the website, set up an account by providing the necessary details.

To create your account, you'll need to enter your personal information, including your Aadhaar number and registered phone number, to receive an OTP (One-Time Password) for verification.

The OTP will be sent to your registered phone number, so make sure to have it handy. Use the OTP to verify your identity and submit a self-attested copy of your Aadhaar card.

After submitting your application, you can check the status of your application by visiting the KRA website and entering your PAN number.

For Non-Resident Indians (NRIs), the KYC process requires additional documentation due to their non-resident status.

NRIs are required to submit their passport as both Proof of Identity and Proof of Address.

A Residence Visa is also necessary, which proves the NRI's legal status in the foreign country.

Foreign Address Proof, such as utility bills or bank statements, must be submitted to verify their address outside India.

These documents need to be attested by the Indian Embassy, Notary Public, or a correspondent bank with verifiable signatures.