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What is eKYC? Full form, meaning & how to do Aadhaar-based e-KYC online

What is eKYC? Full form, meaning & how to do Aadhaar-based e-KYC online

The digital age has modernized many vital services we use daily, upgrading them to be faster and more cost-effective. Among these is e-KYC, or Electronic Know Your Customer.

E-KYC is the digital version of the Know Your Customer (KYC) process used in financial institutions. This highly secure and efficient process lets you verify your identity for financial transactions using your Aadhaar number.

This article will explore eKYC’s meaning, its types, and the application process.

What is eKYC? Full form, meaning & Aadhaar-based eKYC explained

The e-KYC full form is Electronic Know Your Customer. It is a digital service that verifies your identity via Aadhaar authentication.

The e-KYC mechanism is provided by the Unique Identification Authority of India (UIDAI) and allows instant verification of the Aadhaar number holder’s identity. It is the modern, paperless version of the Know Your Customer protocol mandated for all financial institutions by the RBI (Reserve Bank of India).

Since e-KYC is a paperless process, it significantly reduces the costs associated with the traditional Know Your Customer process.

Advantages and benefits of eKYC in India

E-KYC provides several benefits, including:

  1. E-KYC is cost-effective as it lets you avail identity verification and authentication processes without charging fees.
  2. E-KYC provides immediate results in just a few minutes due to its digital and paperless nature.
  3. The e-KYC ensures easy and secure authorization. Your UIDAI information is provided to the relevant parties only after you give approval through secure methods like OTP or biometric verification.
  4. E-KYC reduces the risks of document forgery due to its secure digital procedures and authentication requirements.

Types of eKYC: Aadhaar OTP, biometric, offline & video KYC

There are several types of e-KYC methods used in India to verify a person’s or organization’s identity. These e-KYC types include:

  1. OTP-based e-KYC: In this method, you provide your Aadhaar number to get an OTP to your registered mobile number. You then use this OTP to complete the verification process. OTP-based e-KYC is the most convenient type for most people as it requires no biometric data or physical interactions.
  2. Biometric-based e-KYC: In this method, you provide your Aadhaar number along with biometric data like fingerprints. The provided data is used for verification by matching it with the data stored in the UIDAI database. Biometric-based e-KYC ensures high security due to the unique biometric data requirements.
  3. Offline e-KYC: This method is unique due to its offline nature. You download a digitally signed XML with your demographic details from the official UIDAI website. This XML file can then be provided wherever KYC is required. This method allows you to ensure your privacy without revealing your UID number.

Eligibility criteria for eKYC registration

If you are a resident Indian citizen with an Aadhaar number, you automatically qualify for e-KYC and only have to complete the application process.

Additionally, Non-resident Indians (NRIs) and foreigners who have been living in India for 182 days in the twelve months before applying for Aadhaar are also eligible for e-KYC.

eKYC documents required: Aadhaar, PAN, photo & more

As e-KYC is an entirely digital and paperless mechanism, it requires no documentation. You only require your Aadhaar number to get your KYC done online. You will be asked to upload a self-attested copy of your e-Aadhaar to the KYC registration agency (KRA) of your choice. Any other document requirements will be mentioned on the KRA’s portal.

Additionally, you may have to provide a passport photograph to avail e-KYC services.

How to do eKYC online: Step-by-step process

It is easy to apply for an e-KYC online. Follow the steps given below for a hassle-free e-KYC registration process:

  1. Visit any SEBI-licensed KRA’s official website (Know Your Customer Registration Agency).
  2. Create your personal account by filling in the required details.
  3. Provide your personal details, including your Aadhaar number and registered mobile number.
  4. Enter the provided OTP and complete the verification process.
  5. Submit a self-attested copy of your Aadhaar card.
  6. Visit the KRA’s web portal and input your PAN number to keep up with your application status.

eKYC status: How to check & track your application?

Follow the straightforward steps given below to check your e-KYC status:

  1. Visit the official Central Depository Service Limited (CDSL) website.
  2. Click on ‘Inquire Your KYC.’
  3. Fill in the required details, including your PAN or Aadhaar number.
  4. Enter the provided captcha.
  5. Click ‘Submit’.

After completing this process, your e-KYC verification status will appear. If your application is verified, your status will show as ‘Verified by NDML.’ Otherwise, your status will appear as ‘Pending’.

eKYC vs Regular KYC: Key differences simplified

Regular and eKYC in India are both methods to verify customer identity. However, their process and speeds vary. The following table highlights the differences between eKYC and regular KYC.

ParametereKYCRegular KYC
ProcessFully digital and paperlessPhysical documents are required
Time takenA few minutesTakes days to process
VerificationAadhaar OTP, biometrics, or videoIn-person or document submission
ConvenienceHigher, can be done onlineLower, a branch visit is needed
CostLower for banksHigher due to manual handling

In a nutshell, eKYC is faster and more convenient, while regular KYC is used when digital verification is not possible.

Aadhaar-Based eKYC: Eligibility, safety & government norms

Aadhaar-based eKYC allows banks and financial institutions to quickly verify a customer’s identity using their Aadhaar number. It is regulated by UIDAI and follows strict government and RBI guidelines to ensure data security.

Individuals who are eligible for eKYC with Aadhaar include Indian residents with a valid Aadhaar number linked to their mobile number.

The government ensures that Aadhaar-based eKYC is a secure system through the following norms:

  • It uses encrypted OTP or biometric authentication.
  • It follows UIDAI consent-based data sharing rules.
  • It complies with RBI and data privacy guidelines.

eKYC with Aadhaar is a safe and efficient process. It is commonly used by many financial institutions.

eKYC meaning in banking: Why financial institutions need eKYC?

eKYC’s meaning in banking is digitally verifying a customer’s identity without physical documents. Financial institutions need eKYC to speed up account opening, prevent fraud, reduce paperwork, and comply with RBI and government regulations. It also improves customer convenience and security.

Conclusion

The fast, paperless, and secure services provided by e-KYC make it an invaluable mechanism for both customers and organizations. Understanding the meaning of eKYC will help you benefit from this modern and efficient way to easily verify your identity during financial transactions.

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FAQs

What is eKYC of Aadhaar?

E-KYC of Aadhar is an electronic service that verifies your identity using your Aadhar card. This mechanism is provided by the Unique Identification Authority of India (UIDAI) and provides authenticated instant verification of the Aadhar number holder’s identity.

Who is eligible for eKYC?

All resident Indian citizens are eligible for e-KYC. The e-KYC process requires an Aadhar card and a linked mobile number. Non-resident Indians and foreigners can also be eligible for e-KYC if they qualify for Aadhar (living in India for 182 days in the twelve months before applying for an Aadhar card).

What is the cost of eKYC?

The authentication process does not charge any fees. Each e-KYC transaction that involves sharing the e-KYC information of the Aadhar number holder is charged Rs. 20. The 2024 Economic Survey showed that companies have experienced increased ease in the e-KYC process by using Aadhar card services, lowering the cost from Rs. 1,000 to less than six rupees.

Is eKYC safe?

E-KYC is perfectly safe as it requires customers to go through biometric authentication, including checking for the customer’s photograph, fingerprint, or iris scan. In most cases, customers are asked to submit a selfie, and its authenticity is verified via the latest technology like live facial recognition.

What is the eKYC full form and its meaning in banking?

eKYC stands for Electronic Know Your Customer. In banking, its purpose is to digitally verify a customer’s identity using Aadhaar or other approved documents without physical paperwork.

How to do eKYC online using Aadhaar for a bank account?

You can complete eKYC online by entering your Aadhaar number on the bank’s website or app. Verify it through an OTP received on your registered mobile number.

Is eKYC through Aadhaar safe?

Yes, Aadhaar-based eKYC is generally safe as it uses encrypted systems, OTP or biometric authentication, and follows UIDAI and RBI security guidelines.

What are the documents required for eKYC registration in India?

Mostly, the Aadhaar is all you need for eKYC registration in India. However, in some cases, you may need to provide your PAN card, Voter’s ID, and mobile number.

Can NRIs and foreigners complete Aadhaar-based eKYC in India?

NRIs with a valid Aadhaar can use Aadhaar-based eKYC. Foreigners without Aadhaar must complete physical KYC or video KYC as per RBI rules.

What is offline eKYC, and how is it different from Aadhaar OTP?

Offline eKYC uses a downloaded Aadhaar XML or QR code without sharing Aadhaar details. But Aadhaar OTP eKYC requires real-time OTP verification.

Does eKYC require biometric authentication every time?

No, eKYC does not always need biometrics. It can be completed using OTP, video KYC, or offline methods, depending on the service provider.

What if my eKYC is pending or failed?

If your eKYC fails or remains pending, you should check the details and retry the process. You can also contact the bank, which may ask you to complete physical or video KYC.

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