e-KYC facility: Important things to know about opening account using e-KYC.
Fulfilling the Know Your Customer (KYC) formalities is an integral part of the process of opening a bank account. This entails submitting identity and address proofs and other details, along with a photograph, to establish credentials. The Unique Identification Authority of India (UIDAI) has introduced an Aadhaar-based e-KYC facility, which has reduced the paperwork.
e-KYC has been developed by Unique Identification Authority of India (UIDAI) to make the whole “Know Your Customer” process paperless. Banks or any organization partnered with UIDAI can use e-KYC to electronically verify an applicant’s credentials i.e Name, Address, Date of Birth, Gender, Phone & Email (where available) & Photograph to save time on the documentation. The consent by the resident can be give via a Biometric authentication or an One Time Password (OTP) authentication. This facility can be beneficial for customers and Banks alike because of the convenience involved.
What are the key features of the eKYC service?
- Paperless : The service is fully electronic, enabling elimination of KYC document management
- Consent based: Data is shared by the resident consent through Aadhaar authentication, thus protecting resident privacy.
- Secure and compliant with the IT Act: Data transfer are secured through the use of encryption
and digital signature as per the Information Technology Act, 2000 making e-KYC document legally equivalent to paper documents.
- Non-repudiable : The use of resident authentication for authorization, the affixing of a digital signature by the service provider originating the e-KYC request, and the affixing of a digital signature by UIDAI when providing the e-KYC data makes the entire transaction non-repudiable by all parties involved.
- Instantaneous: The service is fully automated, and KYC data is furnished in real-time, without
any manual intervention.
- Regulator friendly: The service providers can provide a portal to the Ministry/Regulator for
auditing all e-KYC requests.
How to open Bank Account with e-KYC facility?
The customer needs to visit the bank branch for opening the account and fill up the prescribed form. He is then required to provide his 12-digit Aadhaar number to the bank, which enters this on the UIDAI server.
The customer is also required to undergo a scan of his fingers on the biometric reading device. This device is also connected to the UIDAI server.
Once the Aadhaar number and biometric scan are submitted on the server, both are matched and the identity of the customer is validated. A transaction receipt is created with a unique transaction reference number. The screen shows the customer information, including name, address, date of birth, gender and contact details.
Opening of Account: Once the transaction reference number is generated, it is entered in the bank’s system to create a customer account. When the new account is opened, a welcome kit is provided to the customer.
Banks accepting e-KYC for account opening:
At present, Not all banks are accepting e-KYC for account opening. State Bank of India, Axis Bank, Oriental Bank of Commerce are accepting e-KYC.