How Digital Stamping Enables Loan Automation For Banks
Paying stamp duty is a vital part of almost any transaction in the country, from the disbursal of different kinds of loans to handing out various insurance policies.
In order to understand how digital stamping can ease documentation task flow for banking institutions, it is essential to examine the operational procedures of banks that involve handling large volumes of physical stamp papers manually.
Right from availability, procurement, logistics, to storage, banks face a wide array of challenges dealing with numerous stamp papers every day. In addition, the distribution of stamp papers, along with evidencing them through manual receipts, is a tedious task for these institutions.
With the help of digital stamping, banks can conveniently provide their customers with authentic digital stamp papers for processes like availing of loans. Along with that, digital stamps for documents can also offer a secure document collection and retrieval mechanism for banks.
What is Digital Stamp Paper?
A digital stamp paper is an electronic method to stamp digital documents by paying the nominated stamp duty online. It is an e-document where denominations are affixed based on the amount of stamp duty that needs to be paid across different applications and processes.
The digital method ensures that there is no leakage in the government revenue, as the stamp duty will be paid online to the central or state governments.
Digital stamping also offers a secured electronic form of information storage by providing a central data bank for quick verification and retrievals. By using digital stamps for documents, banks can quickly disburse home loans, education loans, vehicle loans, etc., to their customers, helping them avail of the required services on time.
In addition to enabling banks to implement loan automation, digital stamping also allows banking institutions and their customers to also easily verify digital stamp certificates for the document’s authenticity.
How Can Banks Get Documents Digitally Stamped?
The customer journey for digitally stamping a document involves the following steps:
- The customer logs into SignDesk via the bank’s app or web page
- The customer fills their details into a bank form template
- Stamping details are customized to be auto-filled (upon requirement)
- The customer then enters their Aadhaar number to receive an OTP on their registered mobile number
- Once the OTP is entered and verified, the form is eStamped and eSigned in seconds
- The final form is shared with the customer for download
A bank’s Loan Management System (LMS) can be scaled and streamlined by loan automation using digital stamping.
The digital stamping process for documents can be smoothly integrated with a bank’s workflows spanning loan disbursal, account opening, etc via APIs, mobile SDKs or for Desktop portals. The end-to-end process of a bank disbursing a loan to its customer through eStamp integration is explained below.
- The customer’s details are verified, and a sanction letter is issued, which he/she has to eSign.
- Upon authenticating the letter, the KYC details and the supporting documents required to complete the loan agreement are uploaded onto the digital stamping portal.
- The loan document is digitally stamped, and the concerning stamp duty is paid online. Following this, a digitally stamped loan agreement is generated for authenticating the eStamp online.
- The stamp paper and the loan agreement are merged to form a single, digital document that is duly electronically stamped and is enforceable by eSignature.
The Benefits of Digital Stamping For Loan Disbursal and Documentation
- Quick and Easy Availability: In the absence of digital stamp papers, one would have to apply for stamp papers post, which stamp papers of different denominations had to be matched to add up to the total amount. This caused a lot of inconveniences, along with delaying the process.
With digital stamp papers, the problems are solved as they are readily available digitally, helping banks speed up their processes with loan automation. The ability to pay stamp duty online in real-time without the need for manual involvement adds to the ease of the stamping process. A digital stamp paper can be generated in a matter of minutes, and all the data entered into it will be saved by the SHCIL.
- Scalability: Automating banking workflows with eStamping enables banks to scale their operations quickly. Digital stamping can expedite a wide range of banking operations and assists in quicker account opening, faster loan documentation execution, and also helps banks put out more loans.
- Convenient Process: eStamp paper in banks are available in various denominations, and one can get a stamp certificate starting from a denomination as small as Re. 1. The availability offers convenience to the stamping process, both to the bank and to its customers. In addition, the online stamp duty payment facility streamlines banking processes, adding to the convenience offered by the digital process.
- Fast Retrievals: Digital stamping expedites entire banking workflows like loan disbursement, account opening, loan documentation, etc. Since all the digitally stamped documents would be available under the Stock Holding Corporation of India Limited (SHCIL), which is the record-keeping agency for digital stamp papers, banks can quickly retrieve the required documents whenever they are needed.
- Tamper-Proof Documents: A digital stamp ensures the document is not tampered with as each digital stamp certificate comes with a Unique Identification Number (UIN).
- Risk-Free Procedure: The possibility of using forged or fake stamp paper is eliminated with the implementation of digital stamp papers. To be assured, users can also verify the authenticity of the stamp paper through the inquiry module of the SHCIL website, www.shcilestamp.com
Manual stamping requires tiring attention to detail and also involves too many people and a lot of time. On the other hand, digital stamp papers offer a secure and reliable means for paying the government stamp duty for various processes like loan disbursals.
Digital stamping is a smart way for banks to give out loans seamlessly to their customers. eStamp-enabled loan automation also enables banks to onboard customers quickly and securely while offering them seamless digital journeys for onboarding, account maintenance and changes, and more.
Banks can see an improvement in customer retention and loyalty as there would be no possibility of encountering fake stamp papers that can disrupt the customer’s trust in the bank. This would eventually lead to an increase in revenue and reputation for the banking institution.
Opting for digital stamping also reduces the turnaround time for completing banking processes significantly, enabling banks to increase key metrics such as their loan disbursal and account opening rates. The process also paves the way for efficient loan documentation, helping banks streamline their loan disbursal procedures.
Digital stamping solution providers like SignDesk can help banks streamline their loan disbursal and documentation processes by offering a legally valid procedure to pay stamp duty online.
Get in touch to learn about how banks can make their loan disbursal workflows faster by automating with SignDesk’s digital stamping solution.