What_is_Aadhaar_Based_eKYC (1)
                     What Is Aadhaar Based eKYC?
Introduction - eKYC Online
KYC, which stands for 'Know Your Customer', must be a familiar term for any Indian who tried to get
any utility connections like a bank account, sim & LPG etc.
eKYC is a regulatory policy that has been developed and applied worldwide to curb identity theft,
fraud and money laundering.
Through a KYC form, details of the customer along with photocopies of valid government identity
proofs are collected and stored in a database.
Aadhaar Based eKYC
Aadhaar eKYC is the electronic version of the KYC which is administered by the Unique
Identification Authority Of India (UIDAI).
Like the normal KYC, the idea of eKYC too is to verify the identity of an individual except that it is
done online.
eKYC involves the digital KYC authentication of individuals via demographic & biometric information
stored in the UIDAI database, which is retrieved after the customer verifies their identity.
This customer identification information is collected by UIDAI during the registration process for the
Aadhaar initiative.
eKYC is simple to perform & completely digital. The different types of eKYC differ based on the
methods used by the customer to verify his or her identity before their KYC details are retrieved from
the Aadhaar database.
Online eKYC can be conducted either via OTP or biometric authentication. In these cases, an OTP
is sent to the customer's Aadhaar-registered mobile number to authenticate Aadhaar, or a scanner
is used to read the customer's fingerprints and retina & these readings are authenticated with the
biometric information recorded for that individual in the UIDAI database.
Online eKYC can only be used by financial institutions (FIs) that are regulated. Private entities can
only use eKYC after paying a license fee. They must also pay transaction fee for every KYC
verification performed.
Offline eKYC is performed either via XML or QR code. In the case of Aadhaar XML, the customer
downloads an XML file with his or her demographic information. This file is readable by KYC
verification service providers. Offline eKYC can also be conducted by scanning the QR code on the
customer's Aadhaar card. These methods of eKYC can be used by all businesses including private
entities.
Alternatively, DigiLocker KYC is an option for banks and insurers to offer secure & convenient KYC
verification. Customers with a DigiLocker account upload Aadhaar & other KYC documents to
DigiLocker, and permit registered entities (REs) to view and verify these documents during
onboarding.
DigiLocker KYC can be implemented using APIs, and enable swift & friction-free Aadhaar KYC.
eKYC, therefore, is fast & simple to perform. In most cases, eKYC can be completed simply by
entering an OTP, following which the customer's KYC information is retrieved & verified.
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How Does eKYC Work?
Aadhaar eKYC aims to achieve paperless identity verification through the Internet. It makes use of
the Aadhaar platform to establish the authenticity of a person's identity.
As of now, only Aadhar card users can make use of this feature. So, if you don't have one already,
now would be the right time to apply for an Aadhar.
Typically, eKYC is used by banks or agents providing utility connections or similar services to
customers.
Any organization or agent who wishes to confirm the identity of a potential customer can make use
of the aadhaar eKYC.
The customer can simply use his/her Aadhar card and no other document. This saves the hassle of
having to carry a bunch of docs and eliminates the need for in-person verification.
The working of the eKYC is fairly simple. Any authorized agent or institution can make use of the
eKYC process.
Step-by-step process to do Aadhar eKYC online:
1. The customer produces his Aadhar card before the bank official. The official takes note of the
Aadhaar number.
2. A biometric scanner captures the potential customer's fingerprint or retinal image, though
fingerprint is the popular choice. Mobile OTP based authentication methods are also made available
now.
3. Once the device reads the biometric, the value is communicated to UIDAI via secure servers.
4. The input biometric value is matched with the value stored in the database for that particular
Aadhaar number.
5. If the values match, it would be safe to assume that the potential customer's identity is not
spurious.
6. Following successful verification of the customer's identity, the UIDAI will release all his
credentials like photographs, addresses, date of birth, etc to the bank or agent, thus eliminating the
need to carry around multiple documents.
How To Conduct DigiLocker KYC for Aadhaar:
DigiLocker is a one-stop document storage & management system run by the Government of India.
Users upload their KYC documents (Aadhaar, PAN, Passport, DL, Voter ID) to DigiLocker just once,
and then validate an OTP to provide banks and insurers to directly verify these documents via
DigiLocker.
Steps:
- User creates a DigiLocker account and uploads KYC documents.
- REs integrate With the DigiLocker KYC API.
- During KYC, the user provides their DigiLocker mobile number for verification.
- The user receives an OTP on the same number to authenticate their identity.
- Upon OTP verification, the RE receives KYC details such as Name, DOB, Gender, and Address.
Wide-data coverage in Aadhaar offline eKYC:
One of the major benefits of using Aadhar offline eKYC or OKYC is that it supports most documents
for verification. When the offline eKYC data is obtained, the following data are covered in the XML
file:
- Reference number
- Resident's name
- Gender
- Photo
- Date of Birth
- Mobile number in hashed form
- Email in hashed form
The eKYC data is encrypted with a shared phrase provided by the Aadhaar number holder when
they download the data.
Ways of verification with eKYC:
- Video-based eKYC: A representative verifies the customer remotely via video call. Documents like
PAN, Aadhar, and a signature on plain white paper are verified instantly.
- Image-based eKYC: Verification is done by cross-checking the image of the customer across
various documents and uploaded pictures.
- DigiLocker KYC: Streamlined process using DigiLocker and OTP verification.
The Advantages of Aadhaar eKYC:
- Secure: Only agents and institutions verified by UIDAI can use Aadhaar eKYC.
- Safe: Biometric scanners used are also verified by UIDAI.
- Fast: Allows instant verification and immediate service delivery.
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