What Is eKYC & Why Is It Mandatory for Loans?
Identity verification has become faster and more secure in the digital financial ecosystem of today. With the introduction of eKYC, banks and lenders have simplified the online customer verification process. As a result, customers now enjoy quicker access to services such as opening bank accounts, making investments, and applying for loans. In this blog, we will explore what eKYC is and why it is mandatory.
What is eKYC?
The acronym eKYC stands for Electronic Know Your Customer, an online identity verification method used by banks and other financial institutions. This eKYC meaning mainly relies on Aadhaar-based authentication, One-Time Password, or biometric verification without requiring any physical documents.
Types of eKYC Methods in India
Financial institutions use various digital channels for secure identity verification:
Aadhaar-based e-KYC requires sharing your 12-digit Aadhaar number with the lender, which enables them to pull your details from the UIDAI system.
OTP verification is done by sending a one-time password to your registered mobile, which you use to instantly confirm your identity remotely.
Biometric KYC can be based on a fingerprint or iris scan to securely verify your identity.
During a Video KYC session, a customer service agent verifies your identity by checking your face and authenticating your documents.
Offline e-KYC does not require internet access and uses a highly encrypted XML document or QR code.
- Document-based KYC is achieved by scanning and uploading your identity documents for authentication.
What is eKYC Registration Eligibility Criteria?
To qualify for eKYC registration, you must be an Indian resident aged 18 or older. You need a valid Aadhaar number linked to an active mobile phone for verification. Finally, you must provide explicit consent for data sharing and apply for a service that officially supports digital KYC methods.
Documents Required for eKYC Registration
You need to provide your Aadhaar card and registered mobile number for eKYC registration. In case of financial services, you will have to produce your PAN card, a photograph, and a signature on white paper.
What is eKYC Registration Step-by-Step Process?
Follow these steps to complete the digital KYC process online:
- Visit the service provider or the KRA portal.
- Select the eKYC option.
- Enter Aadhaar number and mobile number.
- Verify identity using OTP or biometric authentication.
- Provide consent and submit the request.
- Upload Aadhaar copy if required.
eKYC Status: How to Check & Track Your Application
You can easily track your eKYC portal registration status online:
- Visit the KRA or CDSL website.
- Click on “Inquire Your KYC”.
- Enter PAN or Aadhaar number.
- Fill in the captcha code.
- Submit the request.
Advantages of eKYC
The digital KYC process provides multiple benefits for both customers and financial institutions:
- Faster identity verification compared to traditional KYC
- Completely paperless and environmentally friendly
- Cost-effective for institutions and users
- Secure authentication using OTP or biometrics
- Reduces risk of identity theft and document forgery
- Instant verification and quick onboarding
- Convenient online access from anywhere
- Enables faster loan approvals and account opening
- Complies with RBI and government regulations
- Supports scalable digital financial services
Why is eKYC Mandatory in India?
eKYC is mandatory for banks and other financial entities as per RBI instructions. Besides meeting legal requirements and facilitating speedy digital onboarding for banking and loan services, it is used to identify fraudsters and to authenticate transactions.
Conclusion
Understanding what is eKYC will definitely be beneficial to the consumers, as this will enable them to rapidly complete their identity verification process safely while accessing financial services. In case you are seeking a loan, discover the fast and easy loan options offered on Ratnaafin and start your electronic verification process without delay.
