E-KYC: Full Form, Meaning, Process, Types, Benefits, & Apply Online

Whether opening a bank account, signing up for a new mobile phone plan, or accessing healthcare services online, confirming your identity is a fundamental requirement. Traditionally, this process involved cumbersome paperwork, in-person visits, and often frustrating delays. However, the digital age has shown a transformative solution: KYC.

e-KYC is a revolutionary approach to identity verification that leverages digital technology to streamline and enhance the entire process. It has rapidly gained traction across various industries, promising greater convenience for individuals and improved business security and compliance.

To know more about what e-KYC is, how it works, its benefits and how you can apply, read this article till the end.

What is e-KYC? Meaning and Full Form

The full form of e-KYC is Electronic Know Your Customer. It represents a modern approach to the traditional Know Your Customer (KYC) process. In this digitalised method, the verification of a customer's identity and address is done without the need for paper documents. The process uses electronic means to confirm these vital details, primarily through Aadhaar authentication.

How Does the e-KYC Process Work in India?

In India, the e-KYC process is easy. You need to provide your Aadhaar number and consent to the service provider to access your data. The service provider will then access the UIDAI database and verify your identity, address, and other demographic details.

This rapid and secure approach eliminates the need for physical documents. You can complete the e-KYC process using biometrics or an OTP sent to your registered mobile phone. This makes it easier for you to obtain financial institution services.

Difference between Aadhaar Authentication and Aadhaar e-KYC

Aadhaar Authentication and Aadhaar e-KYC are services offered by the Unique Identification Authority of India (UIDAI) to verify your identity. They have some differences, including:

Aadhaar e-KYC

The process of Aadhaar e-KYC provides access to personal information such as gender, name, address, and date of birth of the resident. The resident's details are matched with those stored in the UIDAI database. The UIDAI only shares the data that is required to prevent unauthorised usage of the data. e-KYC offers a speedy and paperless method for securely confirming your identity.

Aadhaar Authentication

Aadhaar Authentication only verifies your identity with the UIDAI database. The process does not involve sharing personal information. The process matches the information with the UIDAI data and responds 'Yes' or 'No' based on the availability of the information.

What are the Documents Required for e-KYC?

e-KYC does not require documents as the process is digital, and the data is easily verified in the UIDAI database. However, sometimes you may need your Aadhar Card.

Understanding Online e-KYC

Online e-KYC is a swift and convenient way to verify your identity digitally. It involves using your personal information, often extracted from official documents like your Aadhaar card, to confirm your identity remotely.

This process uses advanced technology to match the details you provided with the records stored in official databases. Once your identity is verified, you can access various online services and applications.

What are the Advantages of e-KYC?

e-KYC offers several advantages. Some of them are:

1. Authorisation Required

This process necessitates your authorisation. The party making the request can access UIDAI information only after you grant approval, which can be done through a one-time password or biometric verification.

2. Reduced Risk of Document Forgery

Through e-KYC, the risk of document forgery is low. It is difficult to impersonate since e-KYC depends on secure digital procedures and your unique traits, such as fingerprints or eye scans.

3. Immediate Results

e-KYC provides speedy results that take less than a few minutes.

4. Cost-Efficiency

The authentication procedure does not incur any charges or fees. You can get identity verification and authentication processes without incurring financial expenses.

Key Types of e-KYC in India

In India, several types of e-KYC methods are used for identity verification. Some of them are:

1. OTP Based e-KYC

This is a simple and quick method where you provide your Aadhaar number, and an OTP is sent to your registered mobile number. The OTP is used to complete the verification process. This method is convenient as it requires no physical interaction or biometric data.

2. Biometric Based e-KYC

In this method, you must provide your Aadhaar number and biometrics such as fingerprints or iris scans. This data is then matched with the data stored in the UIDAI database for verification. This method provides a higher level of security as biometric data is unique to each individual.

3. Offline e-KYC

This is an offline method where you can download a digitally signed XML which contains your demographic details from the UIDAI website. You can then provide this XML file for KYC purposes. This method ensures privacy, allowing you to share only specific information without revealing your UID number.

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How to Apply for KYC Online?

Applying for e-KYC online is a straightforward process. Here are the steps to follow:

Step 1: Apply Online for e-KYC

Firstly, you must visit any SEBI-licensed KRA's official website (Know Your Customer Registration Agency). Notable KRAs include CDSL Ventures Ltd and DotEx International Limited.

Step 2: Create Your Account

Then, create your savings accounts by providing the required details.

Step 3: Input Personal Details

You must fill in your details, including your Aadhaar Card number. You must also enter your registered phone number to receive an OTP for verification.

Step 4: Verification

After receiving the OTP, you must complete the verification process. Also, submit a self-attested copy of your Aadhaar card.

Step 5: Check Application Status

Now, to monitor the status of your application, you must visit the KRA's web portal and input your PAN number.

Future Trends and Developments Expected in the field of e-KYC

The e-KYC industry has witnessed tremendous growth in recent years. This is due to strict government rules to prevent money laundering and financial crime and the increasing use of digital payment methods. Some future trends and developments expected in the field of e-KYC are:

Blockchain Integration
AI and Machine Learning
Remote Verification
Global e-KYC standards
Biometric Enhancements
Stricter data privacy regulations will influence how e-KYC is conducted
Mobile-based e-KYC solutions will become increasingly popular
AI-Powered Document Verification
Integration with the Internet of Things (IoT)
Decentralised Identity

Conclusion

e-KYC is an innovative digital method for confirming your identity. It has made the verification process quicker and more straightforward. Additionally, the process has reduced fraud and made the whole process digital. Thus, e-KYC is a ground-breaking revolution brought by the government that has reduced the manual verification process.

FAQs

1.) What is Aadhar eKYC and government regulations?

Aadhar eKYC is a paperless Know Your Customer process using Aadhar authentication. The Government of India regulates it under the Aadhar Act, ensuring secure verification and data protection.

2.) Are there any fees associated with e-KYC services?

Kotak provides e-KYC services for free. There are no additional charges for completing an eKYC or a video KYC verification.

3.) Who is eligible for eKYC?

Indian residents who have an Aadhar card can undergo eKYC. It is commonly used for identity verification purposes.

4.) Why is eKYC necessary?

eKYC streamlines identity verification, making it faster, more efficient, and reducing paperwork. It enhances financial inclusion and helps in the digitalization of services while maintaining security.

5.) How to Check e-KYC Status?

To check e-KYC status, visit the respective service provider's website, log in to your account, and navigate to the KYC section. You'll find the status and any pending actions there.

7.) How do I download my e-Kyc certificate?

To download your e-KYC certificate, log in to the website. Go to the KYC section, and there should be an option to download your certificate.

8.) Do we need to update KYC every year?

There’s no need to update your KYC every year if you are a Kotak Mahindra Bank customer. However, you may be required to confirm your KYC details at times for verification and security purposes.

9.) How to change KYC details online?

To change KYC details online, visit the bank's website or app. Navigate to the KYC section, and select the option to update or edit your KYC information. Fill your details and save.

What is e-KYC? Definition, Process, Documentation & How It Works