What Is Aadhaar Based eKYC?

Introduction – eKYC Online 

KYC, which stands for ‘Know Your Customer’, must be a familiar term for any Indian who tried to get any utility connections like a bank account, sim & LPG etc.

eKYC is a regulatory policy that has been developed and applied worldwide to curb identity theft, fraud and money laundering.

Through a KYC form, details of the customer along with photocopies of valid government identity proofs are collected and stored in a database.

Aadhar Based eKYC 

Aadhaar eKYC is the electronic version of the KYC which is administered by the Unique Identification Authority Of India (UIDAI).

Like the normal KYC, the idea of eKYC too is to verify the identity of an individual except that it is done online.

eKYC involves the digital KYC authentication of individuals via demographic & biometric information stored in the UIDAI database, which is retrieved after the customer verifies their identity.

This customer identification information is collected by UIDAI during the registration process for the Aadhaar initiative.

eKYC is simple to perform & completely digital. The different types of eKYC differ based on the methods used by the customer to verify his or her identity before their KYC details are retrieved from the Aadhaar database.

Online eKYC can be conducted either via OTP or biometric authentication. In these cases, an OTP is sent to the customer’s Aadhaar-registered mobile number to authenticate Aadhaar, or a scanner is used to read the customer’s fingerprints and retina & these readings are authenticated with the biometric information recorded for that individual in the UIDAI database. Online eKYC can only be used by financial institutions (FIs) that are regulated. Private entities can only use eKYC after paying a license fee. They must also pay transaction fee for every KYC verification performed.

Offline eKYC is performed either via XML or QR code. In the case of Aadhaar XML, the customer downloads an XML file with his or her demographic information. This file is readable by KYC verification service providers. Offline eKYC can also be conducted by scanning the QR code on the customer’s Aadhaar card. These methods of eKYC can be used by all businesses including private entities.

Alternatively, DigiLocker KYC is an option for banks and insurers to offer secure & convenient KYC verification. Customers with a DigiLocker account upload Aadhaar & other KYC documents to DigiLocker, and permit registered entities (REs) to view and verify these documents during onboarding. DigiLocker KYC can be implemented using APIs, and enable swift & friction-free Aadhaar KYC.

eKYC, therefore, is fast & simple to perform. In most cases, eKYC can be completed simply by entering an OTP, following which the customer’s KYC information is retrieved & verified.

How Does eKYC Work?


Aadhaar eKYC aims to achieve paperless identity verification through the Internet. It makes use of the Aadhaar platform to establish the authenticity of a person’s identity.

As of now, only Aadhar card users can make use of this feature. So, if you don’t have one already, now would be the right time to apply for an Aadhar.

Typically, eKYC is used by banks or agents providing utility connections or similar services to customers.

Any organization or agent who wishes to confirm the identity of a potential customer can make use of the  aadhaar eKYC.

The customer can simply use his/her Aadhar card and no other document. This saves the hassle of having to carry a bunch of docs and eliminates the need for in-person verification.

The working of the eKYC is fairly simple. Any authorized agent or institution can make use of the eKYC process.

When a customer approaches an agent/institution with a service request, identity verification of the customer is the first step.

To make things much clear, let’s consider the example of a man who wishes to open a new bank account with a nationalized bank.

Now, the conventional procedure would require him to carry necessary documents to prove his identity and address, and also a minimum amount of cash required to open an account.

Step-by-step process to do Aadhar eKYC online:

  1. The customer produces his Aadhar card before the bank official. The official takes note of the Aadhaar number.
  2. A biometric scanner captures the potential customer’s fingerprint or retinal image, though fingerprint is the popular choice. Mobile OTP based authentication methods are also made available now.
  3. Once the device reads the biometric, the value is communicated to UIDAI via secure servers.
  4. The input biometric value is matched with the value stored in the database for that particular Aadhaar number.
  5. If the values match, it would be safe to assume that the potential customer’s identity is not spurious.
  6. Following successful verification of the customer’s identity, the UIDAI will release all his credentials like photographs, addresses, date of birth, etc to the bank or agent, thus eliminating the need to carry around multiple documents. The UIDAI lets the agent/organization store a soft copy of all the details in their remote server lending the agent/organization the freedom to access it as and when the need arises.

How To Conduct DigiLocker KYC for Aadhaar

DigiLocker is a one-stop document storage & management system run by the Government of India.  Users upload their KYC documents (Aadhaar, PAN, Passport,  DL, Voter ID) to DigiLocker just once, and then validate an OTP to provide banks and insurers to directly verify these documents via DigiLocker.

  1. User creates a DigiLocker account and uploads KYC documents. REs integrate With the DigiLocker KYC API
  2. During KYC, the user provides their DigiLocker mobile number for verification. The user receives an OTP on the same number to authenticate their identity.
  3. Upon OTP verification, the RE receives KYC details such as Name, DOB, Gender, and Address. The RE may also verify the user’s Aadhaar using DigiLocker.
  4. Onboarding resumes after the customer’s KYC is verified using DigiLocker.

Wide-data coverage in Aadhaar offline eKYC

One of the major benefits of using Aadhar offline eKYC or OKYC  is that it supports most documents for verification. When the offline eKYC data is obtained, the following data are covered in the XML file – 

  • Reference number
  • Resident’s name
  • Gender
  • Photo
  • Date of Birth
  • Mobile number in hashed form
  • Email in hashed form

The eKYC data is encrypted with a shared phrase provided by the Aadhaar number holder when they download the data.

Ways of verification with eKYC

Electronic or digital KYC comes in various forms that can be utilized according to the requirements and the circumstances. It works with Optical Character Recognition (OCR) that uses biometric information to read, analyze and verify the information. Digital KYC can be done in one of the two ways –

  • Video-based eKYCIn the video-KYC process, a representative will verify the customer remotely via video call. Documents such as PAN, Aadhar, and a physical signature drawn on plain white paper, are crossed checked and verified instantly. This process takes 5 minutes and can be done online from anywhere without the physical presence of the customer.
  • Image-based eKYC – The verification is done by cross-checking the image of the customer across various documents and uploaded pictures.
  • DigiLocker KYC KYC verification is streamlined using DigiLocker. Users perform a one-time upload of KYC documents to the DigiLocker storage vault.  REs then verify these documents after the user validates an OTP.

The Advantages of Aadhaar eKYC

Aside from the obvious benefits like convenience and paperless identity verification, there are some other benefits that are hard to ignore. They are as follows –

  1. Not everyone can use eKYC verification services. Only agents and institutions that have been verified by UIDAI can make use of the Aadhaar eKYC method. This means that your credentials will never go into the hands of people with malicious intent as long as eKYC is used. Currently, even roadside stalls sell mobile sims after collecting copies of your identity and address proof. This is not a safe arrangement. eKYC eliminates the possibility of frauds and identity thefts.
  2. The biometric scanners used by agents/institutions too would have to be verified by UIDAI, which adds another layer of security.
  3. eKYC often allows instant verification and thereby https://uidai.gov.in/ant opening of bank accounts or mobile sim activation. This is expected to save much time.
  4. The eKYC process is absolutely free of cost.

Need Aadhar-based Services?

The introduction of Aadhar has opened up new avenues for paperless verification and fraud deterring methods. For once, the entire country’s population can be digitally recorded and tracked.

Like the eKYC and Aadhar based eSign feature which makes use of the Aadhar number and a mobile number registered with it to digitally sign legal documents, aadhaar eKYC too is expected to take the country by storm.

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