To put an end to problems that most people face while opening a bank account, applying for a passport, to avail pension schemes, etc., Aadhaar e-KYC was introduced by the Ministry of Finance. KYC, commonly referred as Know Your Customer, guidelines have been majorly formed to allow the citizens of India to avail benefits of a government and social welfare schemes. Here’s a sneak peek into the details of it:-
What is Aadhaar-based e-KYC?
At some point or the other, we all have faced difficulties in documentation while opening a bank account, to avail pension schemes, in PF disbursement and other things of this sort. Sometimes we don’t follow the right procedure, miss the paperwork or the documentation is not done right. Aadhaar e-KYC, however, puts an end to all such issues as it is a government issued unique identity card that serves as a valid proof of address and identity in various government and social welfare schemes. Aadhaar e-KYC service makes financial processes, banking services and government-based schemes a lot simple and time-saving. Also, it helps prevent financial fraud, identity theft, etc.
Understand the benefits of Aadhaar-based e-KYC
1. Paperless procedure: Aadhaar e-KYC is an absolutely paperless process. Here all the documents are submitted electronically.
2. Eliminates identity theft: Since Aadhaar card saves the biometric details of an individual, therefore, one cannot fake identity to avail the benefits. Plus, e-KYC facility from Aadhaar does not require you to provide multiple copies of important documents, thus, decreasing the chances of fraud and identity theft.
3. Makes the process simple and quick: Be it opening a bank account, applying for a passport, claiming benefits under the government pension scheme or buying mutual funds, with Aadhaar based e-KYC everything can be done with just a click.
Aadhaar based e-KYC is equally benefiting customers as well as service providers. While the customers can put an end to tiresome documentation process, service providers can get a sense of relief that they do not have to deal with ample paperwork themselves. Furthermore, the requirement of collecting and submitting photocopies, plus careful handling of documents is also not a problem here because the whole process is centralized and the information is stored digitally. The concept of Aadhaar-based e-KYC is economical too as service providers and customers can save money on paper cost. Also, all the information here is available online which can be easily accessed, read and audited.
How to apply for Aadhaar e-KYC?
The process to apply for Aadhaar-based e-KYC facility is fairly easy. All you need to do is to follow the steps given below:
- Apply for your Aadhaar (if you do not have by now)
- Allow your bank and Mutual Fund company to access your information from UIDAI’s Central Data Repository.
- Visit your mutual fund’s website or the official website of your bank
- Duly fill the application form online with all accurate information (Any negligence in this step would lead to application rejection)
- Scan and upload your documents (such as your address and identity proofs) and your photograph
- Generate a one-time password (OTP) that you will get on your registered mobile number mentioned in your Aadhaar card.
- Enter the OTP in the box and click ‘Submit’
- Once done with this, the bank and the Mutual Fund company will get in touch with you for Electronic In-person Verification (EIPV). This is completed via real-time video verification.
- In the EIPV verification process, you are required to provide PAN, Aadhaar or bank statement as a proof
- Soon after your KYC registration is completed and verified, a confirmation mail will be sent through a postal mail or e-mail.
- The KYC verification status can be checked online.
You can apply for the e-KYC process online while being in the comfort of your home or at the workplace. However, some mutual companies require you to sign in a physical KYC form and send it to them either by visiting the company physically or sending it to them via post. In this case, you need not have to send your documents for verification.
What happens once you send your Aadhaar e-KYC application?
Once you have duly filled the e-KYC application form and send it to the respective bank, mutual fund, etc. and you wait for your verification, here is what happens at the back-end:-
- Your bank will seek consent from UIDAI for making use of the e-KYC facility
- They will then require your Aadhaar number to find out all essential yet basic information such as your name, address, phone/mobile number, photograph, DOB, etc.
- Once these details are accessed, saved and verified, your account will be opened immediately.
What differentiates Aadhaar e-KYC from customary processes?
Usually, to avail any government-based service, you are required to submit ample proofs that verify your identity and address. Also, you need to get a mobile and e-mail verification done. However, when you apply through Aadhaar-based e-KYC process, it does not require you to provide any other identity proofs and details. Just an Aadhaar card is enough to validate your address and identity. Linking Aadhaar number with mutual funds has made investments very easy.
Restrictions associated with Aadhaar-based e-KYC
As per the guidelines set by SEBI (Security and Exchange Board of India), individuals registered with Aadhaar-based e-KYC facility can make a mutual fund transaction of Rs 50,000/- every financial year. This is applied to one single mutual fund company.
Conclusion: – Applyfor yourAadhaar card e-KYC facility has appeared as a boon for the citizens of India. It is the fast, effective and secure way to get things done that are otherwise time-consuming and require a lot of paperwork and formalities. Aadhaar-based e-KYC is not just limited to banks and mutual fund houses, other institutions including railway authorities, stock exchange, LPG service providers, a stock exchange can also make use of the e-KYC facility to make their life simple.