What is Aadhaar KYC and How to do it Online & Offline

The Reserve Bank of India has made it mandatory for banks, financial institutions and other organisations to verify the identity and address of all customers carrying out financial transactions. To do it without much hassle, KYC method is used. KYC or Know Your Customer is a process through which a bank or an institution verifies the identity and address of an individual. One of the most common methods to perform it is through Aadhaar KYC.

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What is KYC

KYC enables an institution to authenticate the identity and address of an individual. A customer has to submit his KYC before he starts investing in various instruments such as mutual funds, fixed deposits, bank accounts, etc. However, an individual has to do it only while he starts investing for the first time.

KYC ensures that banks are not used for carrying out money laundering activities.

KYC came into existence in 2002 in India and RBI, in 2004, made it mandatory for all banks to carry out KYC of customers by December 2005.

Why Should you do KYC

When you get your KYC done, you inform the bank about your identity, address and financial history. This helps banks ensure that the money invested in it is not for money laundering/illegal activities.

KYC is also mandatory for making mutual fund investments. However, you are not required to carry out KYC before investing in different fund houses each time.

When is KYC Required

KYC is required before making investments for the first time. Some banks also require customers to file KYC at the time of opening a bank account or investing in fixed deposits.

Types of KYC

There are two types of KYC:

• Aadhaar-based KYC
• In-Person-Verification (IPV) KYC

Aadhaar-based KYC allows a customer to perform KYC using his Aadhaar details online. However, he is allowed to invest only up to Rs. 50,000 every financial year per fund.

In case the customer wants to invest more in a specific fund every year, he needs to get In-Person-Verification done. The customer can either visit a fund house office or KYC kiosk for in-person verification or authenticate using Aadhaar-biometrics by calling the KRA (KYC Registration Agency) executive to his home/office.

Some mutual fund houses allow customers to get their IPV KYC done through video call where they have to display their original identity and address proof. Once completed, the bar of Rs. 50,000 maximum investment amount is lifted for such customers.

How to Do KYC

KYC can be done in three different ways-

• Online – Using Aadhaar-based biometric authentication
• Online – Using OTP authentication
• Offline

How to Do KYC Online

There are two methods to do KYC online or e-KYC – Aadhaar OTP and Aadhaar-based Biometric KYC. Aadhaar OTP allows one to get the KYC done quite easily in minutes whereas in Aadhaar-based Biometric KYC, one has to apply for KYC online and an executive from the KRA visits his home/office for biometric verification.

Using OTP Authentication

Follow the steps mentioned below to do your KYC online using OTP authentication:

Step 1: Visit the website of any KRA (KYC Registration Agency) or a fund house. Some of the KRAs are as follows – NDML, CAMS,  CVL and NSE

Step 2: Enter your details as mentioned in your Aadhaar card

Step 3: Verify using the device where you have to enter the OTP sent to the mobile number registered with Aadhaar.

Step 5: Submit your application

Step 6: Once verified with UIDAI, the KRA approves your KYC

Step 7: You can check the status of your KYC request by visiting the portal of the KRA using your PAN

Using Biometric Authentication

You can also get your KYC approved through Aadhaar-based biometric authentication. You are allowed to invest only up to Rs. 50,000 p.a. per fund if your KYC is done online.

However, if you get your KYC done through Aadhaar biometric authentication or offline, the bar of Rs. 50,000 is lifted and there remains no maximum limit of investment.

You need to follow the steps mentioned below to do e-KYC using Aadhaar biometric authentication:

1. Visit the portal of any KRA or fund house
2. Perform online KYC as mentioned in the process above
3. Request for biometric authentication online
4. An executive from the fund house visits the address mentioned in the form
5. Show him your original documents and provide your biometrics
6. Your application will be submitted and KYC will be done

How to Do KYC Offline

A customer can do KYC offline as well. However, it may take up to 7 days for the KYC to be approved by the KRA. You have to follow the steps mentioned below for doing KYC offline:

1. Download and fill the KYC form
2. Mention your Aadhaar/PAN details
3. Visit a KRA office and submit the application
4. Attach the proof of identity and proof of address with the application
5. You may have to submit your biometrics as well in some cases
6. You will get an application number which can be used to check the status of the KYC

How to Check the Aadhaar Card e-KYC Status

You can check your Aadhaar card e-KYC status by following the steps mentioned below:

1. Visit the official website of any KYC Registration Agency (KRA)
2. Provide your PAN details

Once done, you will be instantly notified if you are KYC compliant. However, in case you are not KYC compliant, then you will need to follow the biometrics or OTP authentication to complete your Aadhaar e-KYC online.

What are the Benefits of Aadhaar e-KYC

Aadhaar e-KYC is a convenient, time-saving and paperless process. Some key benefits Aadhaar e-KYC include:

• There is minimal risk of forgery due to the digitisation of data
• The process complies with the Indian Government norms and is thus, reliable and trustworthy
• The verification process is instant and is done on a real-time basis
• Privacy of data is guaranteed since the authentication process is carried out through the encrypted network of UIDAI
• The e-KYC process requires the consent of the individual and thus, there are less chances of fraud
• Moreover, the entire process is free of cost and doesn’t require you to pay anything

Difference between Aadhaar e-KYC and Aadhaar Offline KYC

Given below are the key differences between Aadhaar e-KYC and the offline process of Aadhaar KYC:

Aadhaar e-KYC	Aadhaar Offline KYC
It can be carried out digitally and does not require you to be physically present for the documentation process.	It requires you to be physically present at the documentation centre and you need to provide your physical Aadhaar card
More convenient and time-saving option.	Takes more time.
Your identity is verified and you are addressed digitally through Aadhaar card authentication.	The agency needs to confirm the authentication of the user through an OTP or facial authentication mechanism.

Aadhaar Paperless Offline e-KYC

Aadhaar Paperless Offline e-KYC is a digitally signed and secure document generated by UIDAI that can be shared with a service provider/ Offline Verification Seeking Entity (OVSE) by an Aadhaar cardholder to verify his/her identity offline.

The Aadhaar number holder can provide the Aadhaar Paperless Offline e-KYC data in digital (XML/PDF) or physical/printed (QR Code) format.

Aadhaar offline verification involves the following steps:

1. Visit the “My Aadhaar” section on the UIDAI official website.
2. Select “Aadhaar Paperless Offline e-kyc (Beta)” listed under “Aadhaar Services”
3. Enter your Aadhaar Number or Virtual id
4. Create a Share Code of 4-characters and enter the “Security Code”
5. Verify using an OTP or TOTP
6. A password-protected ZIP file (with Share Code as the password) containing the Paperless Offline eKYC will be downloaded onto your device. You can share the ZIP file, the Share Code and the registered mobile number with the service provider, who can then match the information with the information contained in the central database.

Documents Required for KYC

One has to submit some documents to authenticate their identity and address. The list of documents required is mentioned below:

Proof of Identity

Given below are some of the acceptable proofs of identity:

Unique Identification Number (UID) (Aadhaar)/ Passport/ Voter ID card/ Driving license

PAN card with photograph

Identity card/ document with applicant’s photo, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities

Identity cards issued by Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions

Identity cards issued Colleges affiliated to Universities, Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members and Credit cards/Debit cards issued by Banks

Proof of Address

Given below are some of the acceptable proofs of address:

Passport/ Voters Identity Card/ Ration Card/ Registered Lease or Sale Agreement of Residence/Driving License/ Flat Maintenance bill/ Insurance Copy

Utility bills like Telephone Bill (only land line), Electricity bill or Gas bill – Not more than 3 months old

Bank Account Statement/Passbook — Not more than 3 months old

Self-declaration by High Court and Supreme Court judges, giving the new address in respect of their own accounts

Proof of address issued by any of the following: Bank Managers of Scheduled Commercial Banks / Scheduled Co-Operative Bank/Multinational Foreign Banks/Gazetted Officer/Notary public / Elected representatives to the Legislative Assembly/Parliament/Documents issued by any Govt. or Statutory Authority

Identity card/document with address, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities and Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members

For FII/sub account, Power of Attorney given by FII/sub-account to the Custodians (which are duly notarized and/or apostiled or consularised) that gives the registered address should be taken

The proof of address in the name of the spouse may be accepted

KYC FAQs

Q. I have not done KYC but I want to make investment. Can I do it without KYC?

A. No, you will have to complete your KYC before you make an investment for the first time.

Q. I had done KYC while investing for the first time. I want to make investments again. Do I have to do KYC again?

A. If you have already done your KYC once through any SEBI approved entity, you are no longer required to perform KYC again. KYC has to be done only when you make ian nvestment for the first time.

Q. I have not done In-Person-Verification. Can I invest more than Rs. 50,000?

A. You will have to get your IPV done before you can invest more than Rs. 50,000 per fund every year. You can either do it by visiting any KRA office or through Aadhaar-biometric verification.

Q. What is the fee for KYC verification?

A. You do not have to pay any fee for KYC verification. It is completely free of cost.

Q. Which organisations use Aadhaar e-KYC?

A. Nowadays, numerous service providers rely on Aadhaar e-KYC to verify their customers’ details. Some key service providers making use of this facility are:

Financial institutions like banks, insurance companies, mutual fund houses, etc.

LPG service providers

Trading accounts

Railways

Stock brokers

Stock exchanges

KYC registration agencies

Q. Is Aadhaar e-KYC mandatory for all services? 

A. RBI has made it mandatory for banks, financial institutions and other organizations to carry out KYC for customers before they make their investments. It is also mandatory to get your KYC done through any SEBI approved entity, before making your first mutual fund investment. However, it is up to you whether you get your KYC done offline or opt for an Aadhaar e-KYC.

Q. What if my mobile number is not linked with Aadhaar?

A. In case your mobile number is not linked with Aadhaar, then you can only get your KYC done through biometric authentication or offline. You will not be able to get your KYC done via OTP authentication.

Q. What should I do if I receive an error during Aadhaar e-KYC?

A. In case you receive an error during your Aadhaar e-KYC, you can re-check and enter your personal and address details again, re-enter your biometric details, etc.