The Unique Identification Authority of India (UIDAI) has released the API for electronic Know Your Customer (KYC) verification, reports Pluggd.in.
Currently, customers provide verification for the Proof of Identity (PoI) and Proof of Address (PoA) in physical documents, which is a key requirement for access to financial products (payment products, bank accounts, insurance products, market products, etc.), SIM cards for mobile telephony, and access to various Central, State, and Local Government services. In order to go paperless, UIDAI now provides an e-KYC service, through which the KYC process can be performed electronically.
As part of the e-KYC process, the resident can authorize UIDAI (through Aadhaar authentication) to provide their basic demographic data for PoI and PoA along with their photograph (digitally signed) to service providers. For the same, UIDAI has released e-KYC API (pdf) for the service providers so that they can provide a paperless KYC experience by using e-KYC and avoid the cost of repeated KYC, the cost of paper handling and storage, and the risk of forged documents.
The e-KYC API can be used by service providers for two scenarios — for new customer/beneficiary and for existing customer/beneficiary.
How it works: KYC front-end application will capture Aadhaar number + biometric/OTP of resident and form the encrypted PID block. The KYC User Agency (KUA) will sign the data and send it to KYC Service Agency (KSA). The KSA will then forward it to the KYC API where the Aadhaar KYC service will authenticate the resident and if successful will respond with digitally signed and encrypted demographic and photograph. Once the authentication is successful, KSA will send the response back to KUA enabling paper-less electronic KYC. It should be noted that apart from Yes or No responses, UIDAI e-KYC API will not send any data back to the service providers, keeping the user data safe.
In December 2010, RBI permitted Banks to allow users to open no-frills bank accounts with limitations. However, that was removed last year in September when the Reserve Bank of India issued a notification allowing banks to consider letters issued by the Unique Identification Authority of India (UIDAI) for Aadhaar numbers as a valid Know your Customer (KYC) document to enable customers to open all savings accounts and not just no-frills or small accounts.
In February 2012, UIDAI had rolled out a web interface for online authentication of Aadhaar numbers allowing banks, telecom companies and government departments to authenticate an Indian resident on the basis of his Aadhaar number or UID, in accordance with KYC norms and process his application on the same basis.
Nandan Nilekani, Chairman of the Unique Identification Authority of India (UIDAI) will be discussing the opportunities for the Internet and Mobile industry in India in a post-Aadhaar world, to partner and integrate with the unique identity project at the #NAMA Conference to be held in Gurgaon on October 10th, 2012.
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