Aadhaar-based e-KYC

Aadhaar-based e-KYC is likely to be mandatory for financial sector

As Aadhaar is made mandatory for filing Income Tax returns and applying for Permanent Account Number Card (PAN), the government is deciding to introduce Aadhaar-enabled Know Your Customer regime across financial sector in the new financial year. The government is holding consultations with all regulators including the Reserve Bank of India in this regard.

One of the senior finance ministry officials said, “Aadhaar e-KYC provides an instant, electronic and non-repudiable proof, besides having updated contact details, which will help in further streamlining the process of service industry.”

Those individuals, who already have Aadhaar, will have to provide their thumb impression to any of the financial intermediaries. Then, it will be given to the reporting authority of concerned sector and then will be validated from the UIDAI database.

Based on this data, Central Registry of Securitisation and Asset Reconstruction and Security Interest of India (CERSAI) will generate a unique C-KYC number which can be used for all the financial products such as co-operative society accounts, bank accounts, insurance policies, demat accounts and mutual fund investments.

Finance Minister Arun Jaitley has strongly supported making Aadhaar mandatory for all the financial products. The facility of Aadhaar based e-KYC will help individuals or entities wanting to apply for PAN to verify details such as date of birth or address by way of biometric identification using thumb impression.