What is e-KYC? – Intro, Importance, Online & Offline Process, and Much More

1) Introduction

Then why not digitally verify our identity in the financial products or services? Here is where the concept of eKYC takes place. Before proceeding it is important to know about this term and its function.

The eKYC stands for electronic Know your Customer/ Client. It is an electronic form of the to collect personal fibahub and professional data from customers to identify and register them online. In this article, we will discuss the process of eKYC; online and offline, docs required, pros and cons, and much more.

2) Why is eKYC important?

The eKYC process is also known as anti-money laundering. This process was started by RBI (Reserve Bank of India) in 2004 to prevent fraudulent activities in the financial system and to protect online businesses.

3) KYC Process

An individual can perform the KYC process in three ways:

  1. Online KYC
  2. Adhaar-based biometric KYC
  3. Offline KYC

3.1) Online KYC Process

Follow the below steps to proceed with the KYC online:

  1. Open the official website of KRA and provide your consent to process the verification platform.
  2. Then create your account on it by filling xatpes personal details.
  3. After that enter your Adhaar Number which is registered with your phone number.
  4. You will get an OTP on your number and fill it in the input.
  5. Then submit the self-attested copy of your e-Adhaar.
  6. At last, click to agree to all the terms and conditions to process your data.

3.2) Adhaar-based biometric KYC

Follow the below-given steps to do Adhaar-based biometric KYC on your own:

  1. Go to KRA’s official website and select biometric authentication when filling out the registration form.
  2. Follow the submission form and you get a representative who will pay a visit to the applicant’s location.
  3. Then a scanner is used to obtain an image of the fingerprints.
  4. Once you complete the authentication process, your KYC process is complete.

3.3) Offline KYC Process

The following offline methods can be used by any registered financial institution, for instance, brokers, fund houses, or banks to verify the identity of their users. These are listed:

1.  QR Code Scan

The QR code of the applicant’s Adhaar card is scanned to get access to the information such as name, age, and address, without the need to access UIDAI’s Adhaar database.

2.  M Adhaar App

In the Demant account apps, there is a mobile-based authentication process. This is provided by the brokers to access the demographic data of a user.

3.  Paperless Offline KYC

A consumer does not need to give a photocopy of their Aadhaar card to a service provider; instead, they can download the KYC XML from UIDAI’s web portal after completing the offline KYC form. The customer is given a reference ID, and using this ID, service providers can access the user’s details such as name, age, gender, and address from the XML file.

4) Documents required for the KYC Process

  • Adhaar Card
  • Passport
  • Voter ID card
  • Driving Licence
  • PAN Card
  • Photocopy of Passbook

5) Pros and Cons of the e-KYC Process

The following is the list of Pros and Cons of the KYC process:

Time-saving & Cost-savingLimited maintenance level
Secure and ReliableLimited investment of money
Seamless ExperienceNeed to perform a full KYC every year

6) Wrapping Up

To wrap it up, eKYC offers a one-click experience to its users to meet all KYC obligations. Remember that in India, anyone who wants to trade in the stock market, open a bank account, or invest in a mutual fund. He/she must first complete the necessary paperwork. Individuals can complete their eKYC on SEBI’s registered website, and any service provider, including stockbrokers, depository, and other financial and government institutions, can use eKYC to verify the individual’s details.

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