Shyam wants to travel the world and he wants to get a passport created – Passport office would want him to establish his proof of identity and address (PoI and PoA or PoR). Sana has taken admission in a reputed University, she needs a mobile phone in order to be in touch with her parents. TRAI mandates the PoI and PoA for new mobile SIM connections. Gaurav shifted to Bangalore and wants to apply for a gas connection – again he needs to establish his identity and address. Charu has got a new job and her company will transfer her salary into a bank account. For opening a bank account PoI and PoA are required.
We talked about 4 people from different strata with different requirements but one thing in common – a requirement to establish their identity and address. Organizations/ financial institutes / banks call this KYC (Know Your Customer) and KYC norms are mandated almost at every place of importance.
You would have found yourself in a situation where you are either scanning your passport, ration card etc or taking physical photostats as poof of your identity as KYC is majorly a paper based process at most places till now and is really a big pain.
The Bharat part of India is still ok with paper based process, however the Digital India is demanding a change and freedom from paper based KYCs. Apart from being paper based, the process is time taking and error prone. Paper based KYCs undergo OSV (Original Seen and Verified), validation of documents for validity, followed by manual punching in the systems for future retrieval and reference. Imagine a situation, where your particulars have changed and you have to follow the same lengthy process again.
In 2006, Planning Commission unveiled its vision for having a Unique Identity for each Indian. Under the leadership of Nadan Nilekani, wave of Aadhar Card was started with UIDAI (Unique Identification Authority of India).
Unique Identity is called UID, that aims to become a single proof of identity for every Indian just like SSN (Social security number) for Americans. With UID, GoI intends to replace paper based KYC with Aadhar based KYC which is known as eKYC. eKYC is based on authentication modes like-
- Biometrics (fingerprints),
- IRIS scans and
eKYC is not only paper less, secure, safe but almost error proof and quick. Your identity and address are verified electronically which will reduce KYC process from weeks to few minutes.
eKYC is an important initiative under JAM (Pradhan Mantri Jan Dhan Yojana, Aadhar and Mobile enablement) providing service to the unbanked population within country.
How eKYC works?
- When availing e-KYC service, individuals have to authorize the Unique Identification Authority of India (UIDAI), by explicit consent, to release identity or address through biometric authentication to the bank.
- Organizations wish to use eKYC service will first have to get approval and authorization from UIDAI. Once approved these organizations will be called KUA (KYC user agents).
- For verification, these KUAs will have to use biometric scanning devices approved by UIDAI and register the device with UIDAI for accessing the data through the device.
- Information can only be pulled from UIDAI with the consent of the customer. Authentication can be done by sending OTP on a registered mobile number. Once authorized, details of customer are shared back with organization by UIDAI service.
KUAs then just need Aadhar number and customer’s biometric scans (fingerprints through biometric scanner) to fetch customer’s details such as – full name, address, date of birth, mobile number, gender and photograph and will also access and copy all the KYC documents from the UIDAI servers. Information thus provided through e-KYC process is permitted to be treated as an ‘Officially Valid Document’ under PML Rules and is a valid process for KYC verification.
Spice Digital’s participation in eKYC
Very shortly people can provide their UID or Aadhar number and fingerprint impression on a biometric scanner provided at Spice Money outlets for sending the money to their near and dear ones without getting into hassles of carrying physical documentation.
Spice Digital is approved PPI and approved KUA which is operating its services under the brand name Spice Money.