Online account opening is catching up with many banks and financial institutions on boarding their new customers using this paperless method.
To invest your savings in stocks or other instruments and participate in trading in India, you need to open an online trading account with financial institutions. Opening account with the traditional form filling method requires prospects to fill in a form, submit proof of Identity, residency & address, date of birth, etc., along with a photograph.
Submitting all these forms is mandatory, as part of the government’s Know Your Customer (KYC) policy to help determine the identity of the prospect and evaluate the risk of entering a business relationship with such prospect. If you do not have enough copies of these proofs, or forget to carry any of these forms, you may have to wait even longer to open your account.
Fast Forward to Hassle-Free Paperless Account Opening
In an effort to simplify the account opening process, the Government of India and the various regulatory authorities such as Reserve bank of India (RBI), Insurance Regulatory Development of India (IRDA) and the Securities and Exchange board of India have decided to allow paperless account opening by facilitating digital verification process (EKYC) authenticating the information in Aadhaar card.
Unique Identification Authority of India (UIDAI) developed the process of EKYC to facilitate hassle-free and instant online account opening with financial institutions. Many financial institutions can now onboard prospects in much lesser time, save money on printing paper, hiring work force for verification.
Benefits of EKYC
The process of opening an account online with the help of EKYC is hassle-free and quick approach to start trading activities in India.
Onboarding new customer with electronic verification of your details as they appear on your unique identification card, Aadhaar card, reduces the Turn Around time required to start a new business relationship with new customers.
As a tested and proven process, EKYC is error prone. The process, with the support of robust technical framework has gained wider acceptance with many financial organizations. Eliminating human intervention reduces the scope for tampering with the personal data, omission of data, wrong reporting or even chances of forgery.
EKYC improves the efficiency of the financial institutes, as the customer satisfaction levels increase with a reduced turnaround time for onboarding and lower customer acquisition costs. The onboarding time has come down significantly from 8 working days to a day with electronic verification of documents.
The Process of Online Account Opening
Customers who need to open an account with financial institutions for trading in India can authorize such institutions to access their information from UIDAI’s servers. You can do so by visiting the financial institutions’ website and fill in an online application form.
Financial institutions that need access to such information will have to seek approval from UIDAI. Once they get approval from UIDAI, they will be able to access your Aadhaar card electronically, and verify all the details such as your Photograph, full name, gender, date of birth, address and mobile number.
Scan the documents such as Identity proof, address proof, proof of age, etc., and upload them on the institution’s website.
Upload your photograph, once you scan a copy of it.
To confirm the information, you will receive a One Time Password (OTP) to the mobile number listed on your Aadhaar card.
Once you receive the OTP, you need to enter the password in the space provided on the form.
Upon receiving the form, the financial institute will contact you for a verification, which will happen through a video call. Electronic In-Person Verification process is required for physical verification (EIPV).
At the time of EIPV you will have to show your PAN card, Aadhaar card, and your bank statement.
Upon successful verification of EKYC you will receive a confirmation email or regular mail confirming that the verification has been successful. Alternatively, you can check the status of your EKYC online. After successful verification of the details, the financial institute will activate your account instantly.
Successful online account opening helps you Invest your Savings
Once you have successfully completed the EKYC, you can start trading in India. The EKYC is an option available for individual investors and as per SEBI you are eligible to invest 50,000 Rupees a year, at a single mutual fund organization. If you wish to invest more than the set limit, you will have to appear for an in person verification.
EKYC as a fast, hassle free, paperless process of opening account is gaining wider acceptance among many banks, insurance companies, trading houses for onboarding new customers.