Enhanced eKYC to increase efficiency of UIDAI

As a first of a kind, the Unique Identification Authority of India (UIDAI) is transforming the entire KYC (know your customer) process by making it paperless, instantaneous, secure, economical and non-repudiable through electronic medium.

Briefing reporters here, UIDAI Chairman Nandan Nilekani said the electronic Know Your Customer (eKYC) service from UIDAI will enhance customer convenience and greatly increase business efficiency across sectors that require proof of identity and address to open customer accounts. “Not only will this service streamline the process of on-boarding new customers but it will also simplify the process of linking existing customer accounts to their respective Aadhaar numbers in an easy, yet secure manner,” said Nilekani.

He pointed out that the Ministry of Finance has already recognised eKYC as a valid document for all financial services under the Prevention of Money Laundering (PML) Rules.

Further, he observed that the UIDAI is working with sector regulators for extending eKYC to their respective sectors. “The eKYC service will extend the power and convenience of Aadhaar KYC to paperless transactions. Using the eKYC service, residents can authorise the UIDAI to release their KYC data to a service provider,” he added.

This authorisation, Nilekani explained, can either be done in person (through biometric authentication), or it can be done online (through OTP authentication). Upon successful authentication and consent of the resident, the UIDAI will provide the resident’s name, address, date of birth, gender, photograph, mobile number (if available), and email address (if available) to the service provider electronically.’

Dwelling on the salient features of the Aadhaar eKYC service, he said as the service is paperless and fully electronic, document management can be eliminated. Also, the KYC data being consent based, it can only be provided upon authorisation by the resident through Aadhaar authentication, thus protecting resident privacy.

That apart, it eliminates document forgery as photocopies of various documents that are currently stored in premises of various stakeholders reduces the risk of identity fraud and protects resident identity. In addition, since the eKYC data is provided directly by UIDAI, there is no risk of forged documents.

Above all, the fully paperless, electronic, low-cost aspects of eKYC make it more inclusive, enabling financial inclusion. Both end-points of the data transfer are secured through the use of encryption and digital signature as per the Information Technology Act, 2000 making eKYC document legally equivalent to paper documents.

In addition, the use of encryption and digital signature ensures that no unauthorised parties in the middle can tamper or steal the data.  Besides, the use of resident authentication for authorisation, the affixing of a digital signature by the service provider originating the eKYC request, and the affixing of a digital signature by UIDAI when providing the eKYC data makes the entire transaction non-repudiable by all parties involved.

Furthermore, the UIDAI Chairman has reiterated that the target of 60 crore Aadhaar enrolments will be achieved by 2014. More than 40.29 crore Aadhaar numbers have been issued till date and the process is continuing at a healthy pace.