e-KYC and Aadhaar-based authentication are crucial for banking operations and IIBF promotion exams. This topic covers customer onboarding, AML compliance, and digital banking transformation.
What is e-KYC?
e-KYC (Electronic Know Your Customer) is a digital process of verifying identity using Aadhaar authentication under PMLA 2002 and RBI KYC Directions.
Key Features
- Paperless onboarding
- Instant verification
- Fraud reduction
- Regulatory compliance
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Traditional KYC vs e-KYC
| Particular | Traditional KYC | e-KYC |
|---|---|---|
| Mode | Physical | Digital |
| Time | 2–5 Days | Instant |
| Cost | High | Low |
| Fraud Risk | Moderate | Lower |
What is Aadhaar?
Aadhaar is a 12-digit unique identification number issued by UIDAI containing demographic and biometric details.
Uses in Banking
- Identity verification
- Address proof
- Direct Benefit Transfer (DBT)
- Financial inclusion
Types of e-KYC Authentication
1. OTP-Based e-KYC
- Verification through Aadhaar-linked mobile
- Balance limit: ₹2,00,000
- Used for simplified KYC accounts
2. Biometric-Based e-KYC
- Fingerprint or iris authentication
- Full KYC compliant
- Highly secure
3. Offline Aadhaar Verification
- QR code / XML based
- No UIDAI server needed
- Consent mandatory
Types of Accounts Based on KYC
| Account Type | KYC Level | Limit |
|---|---|---|
| Small Account | Minimum KYC | ₹1 lakh/year credit |
| OTP e-KYC Account | Simplified | ₹2 lakh balance |
| Full KYC Account | Complete | No limit |
Important Limits (Exam Focus)
Small Account
- Total credits: ₹1,00,000/year
- Max balance: ₹50,000
- Monthly withdrawal: ₹10,000
- Validity: 12 months
OTP-Based KYC
- Max balance: ₹2,00,000
Full KYC
- No transaction limit
e-KYC Process
- Customer provides Aadhaar
- Consent taken
- Authentication request sent
- OTP/Biometric verification
- Data fetched securely
- Account opened instantly
CKYC Role
CKYC provides a centralized KYC registry with unique KYC ID, reducing duplication and improving efficiency.
Advantages
- Faster onboarding
- Cost reduction
- Paperless system
- Fraud prevention
Challenges
- Data privacy risk
- Technology dependency
- Biometric failures
- Compliance issues
Exam Important Points
- e-KYC valid under PMLA
- Consent mandatory
- OTP KYC has limits
- Offline KYC valid
- CKYC mandatory integration
IIBF Bank Promotion Course
- Full syllabus coverage
- PYQs + Mock Tests
- Concept videos + PDFs
- Hindi-English mix
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, RBI guidelines, authentication methods, video lecture and free PDF notes.){kind=link}