eKYC: Making Onboarding a Breeze in the Digital Age
Have you ever signed up for a new bank account or investment app and got stuck filling out endless forms and mailing photocopies of your IDs ? That is the traditional Know Your Customer (KYC) process. But there's a new game changer in town: eKYC, or Electronic Know Your Customer.
What Exactly is eKYC?
Electronically validating a customer's credentials is known as eKYC, or paperless KYC. In order to use any financial institution's services, this is a must for everyone. Because your identity is electronically confirmed and the service provider can retrieve your Aadhaar details from the Unique Identification Authority of India (UIDAI) database which is also known as Aadhaar-based eKYC. This eliminates the need for time-consuming in-person verification by giving the service provider instant access to your proof of identification and address.
eKYC Process Flow
Process In Detail,
1. Enter PAN Number and DOB:
The eKYC process typically begins by requiring you to enter your PAN number. This unique ten-character alphanumeric code, issued by the Indian Income Tax department, helps identify you for tax purposes. You'll also need to provide your Date of Birth as it appears on your PAN card. This helps ensure the PAN details match your identity.
2. Fetched KRA Details (Known as Customer Registration Agency Details), If Exists:
The system attempts to retrieve your KYC (Know Your Customer) details from a central repository maintained by a Know Your Customer Registration Agency (KRA). If you've already completed your KYC with a KRA in the past, and the details associated with your PAN and DOB match their records, you might be directed to a quicker verification process. This can save you time and streamline the eKYC experience.
3. If Not, Update As On Aadhaar:
In case the system doesn't find any matching KRA details, it might proceed to use your Aadhaar details for verification. Aadhaar is a unique identification number issued by the Unique Identification Authority of India (UIDAI) to residents of India.
4. Aadhaar Validation From Digilocker:
The system interacts with Digilocker, a digital document platform launched by the Government of India. Digilocker allows you to securely store and share digital copies of important documents like your Aadhaar card. By connecting to Digilocker, the eKYC process can attempt to fetch your Aadhaar details electronically, streamlining the verification process.
5. Generate OTP To Fetch Aadhaar Details:
If your Aadhaar details are found in Digilocker, a 6 digit one-time password (OTP) will be sent to your registered mobile number associated with your Aadhaar. This OTP acts as an additional security measure. It ensures that only someone with access to your registered mobile number can authorize the retrieval of your Aadhaar details, helping to prevent unauthorized access.
6. Incorrect OTP, Back To Digilocker:
If you enter an incorrect OTP, the system will prompt you to try again for a limited number of attempts. After exceeding the allowed attempts, it will redirect you back to Digilocker for alternative verification methods.
7. Continue To Proceed:
Upon entering the correct OTP, the system will proceed to retrieve your Aadhaar details from Digilocker and verify them against the information you provided initially. This verification process helps to ensure that you are the rightful owner of the PAN and Aadhaar details being used.
SEBI Registered KRAs
NSE KRA (National Stock Exchange of India): A subsidiary of the National Stock Exchange of India (NSE), NSE KRA is one of the leading SEBI-licensed KRAs. It plays a crucial role in maintaining KYC records of investors who deal with intermediaries registered with the NSE. This not only benefits investors by ensuring a smoother onboarding experience across NSE-registered platforms but also strengthens market integrity by facilitating compliance with KYC regulations.
CDSL Ventures Ltd (CVL): Established in 2011, CDSL Ventures Ltd (CVL) is another SEBI-licensed KRA. It acts as a central repository for KYC records of investors who invest through intermediaries associated with Central Depository Services (India) Limited (CDSL). This standardisation of KYC records across CDSL participants helps streamline the onboarding process for investors and reduces the need for duplicate KYC submissions.
NSDL Database Management Limited (NDML): A wholly owned subsidiary of National Securities Depository Limited (NSDL), NDML is a SEBI-approved KRA. It offers KYC record-keeping services to intermediaries registered with NSDL. By maintaining a centralised KYC database, NDML helps ensure compliance with KYC norms for NSDL-registered intermediaries and promotes investor protection.
Karvy Data Management Services (KDMS): Leading provider of business and knowledge process services in India is Karvy Data Management Services (KDMS). KDMS introduced KRISP KRA, sometimes referred to as Karvy KRA, to the consumer base. By taking advantage of the growing trend of financial product investing in the Indian market today, KDMS intends to broaden its clientele. Karvy operates as a stand-alone company supported by a robust group of seasoned industry professionals and employs cutting-edge technologies for data management. For the benefit of SEBI-registered market firms, Karvy KRA centrally stores client records and lets you verify your KYC status.
CAMS Investor Services Private Limited: CAMS Investor Services Private Limited is a SEBI-licensed KRA that offers KYC record-keeping services to a broad spectrum of financial intermediaries, including mutual funds and portfolio managers. By centralising KYC data, CAMS Investor Services helps streamline the onboarding process for investors and ensures adherence to KYC regulations for various financial products.
Importance of eKYC
Economy of Cost
Businesses can reduce administrative expenses related to manual verification methods by digitizing the verification process. Businesses are able to manage resources more effectively thanks to this cost efficiency, which boosts their profitability and competitiveness.
Adherence to Regulations
eKYC ensures complete client due diligence, which assists firms in adhering to strict regulatory standards. Businesses can reduce the risk of non-compliance and possible penalties by automating identity verification procedures.
Enhanced Customer Convenience
The onboarding process is streamlined via eKYC, which does away with the need for extensive paperwork and physical evidence. Customers will benefit from faster account opening and service access as a result, improving their entire experience.
Financial Inclusion
eKYC streamlines the verification procedure, enabling underprivileged communities to have easier access to financial services. By lowering entrance barriers and allowing those without traditional forms of identification to engage in the formal economy, this promotes financial inclusion.
Preventing Fraud
Real-time consumer identity verification and authentication are made possible by eKYC's digital format. This protects customers and businesses by assisting in the detection and prevention of illicit actions including identity theft and account takeovers.
Steps to Track eKYC Status
1. Head to CDSL's website: Open a web browser and visit the official website of Central Depository Services Limited (CDSL).
2. Find the KYC Status Check: Look for a section or link related to KYC verification. It might be labelled "Inquire Your KYC" or something similar.
3. Enter your information: Depending on how you registered your KYC (Aadhaar or PAN card), provide either your Aadhaar number or PAN.
4. Complete the security check: Type the CAPTCHA code displayed on the screen. This helps ensure you're a real person and not an automated program.
5. See your KYC status: Click "submit" and the website will show your current KYC verification status. It will be something like "Verified" or "Pending".
Modifying eKYC Details
You can update or modify your KYC information online by going to the eKYC portal and doing the following:
1. Go to the online bank website and log in.
2. Choose "Update KYC" under settings.
3. Complete all the fields that are necessary.
4. Upload scanned copies of the paperwork that needs to be verified.
5. Your cellphone number will receive an OTP. For verification to be completed, enter the OTP.
6. To finish the verification process, click Submit.
