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

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Language icon हिंदी में पढ़े
Updated: 30-09-2022 06:37:58 AM

The Reserve Bank of India has made it mandatory for banks, financial institutions and other organisations to verify identity and address of all customers who carry out financial transactions with them. To do it without much hassles, KYC method is used in. KYC or Know Your Customer is a process through which a bank or an institution verifies the identity and address of an individual. 

What is KYC?

KYC enables an institution to authenticate the identity and address of an investor. 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 once when he starts investing for the first time. 

KYC is one such method which 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.

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Why you should do KYC?

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

KYC is also mandatory for making mutual fund investments. However, it is not required to carry out the 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
  • Aadhaar-based Biometric Authentication
  • Offline

How to Do KYC Online?

There are two methods to do KYC online – 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.

Follow the steps mentioned below to do your KYC online:

Step 1: Visit the website of any KRA (KYC Registration Agency) or a fund house

Step 2: Some of the KRAs are as follows – NDML, CAMS, Karvy, CVL and NSE

Step 3: Enter your details as mentioned in your Aadhaar card

Step 4: Verify using the C 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 

How to Do KYC Online through Aadhaar-based Biometric?

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. every 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 have to follow the steps mentioned below for online 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
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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

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 into your device. You can share the ZIP file, the Share Code and 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 identity and address of the client/customer. The list of documents required is mentioned below:

Proof 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

1. Passport/ Voters Identity Card/ Ration Card/ Registered Lease or Sale Agreement of Residence/Driving License/ Flat Maintenance bill/ Insurance Copy
2. Utility bills like Telephone Bill (only land line), Electricity bill or Gas bill – Not more than 3 months old
3. Bank Account Statement/Passbook — Not more than 3 months old
4. Self-declaration by High Court and Supreme Court judges, giving the new address in respect of their own accounts
5. 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
6. 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
7. 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
8. The proof of address in the name of the spouse may be accepted
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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 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 for the first time while making the investment.

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.

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