Amidst the lockdown of COVID-19 pandemic, stockbrokers and online mutual fund mediators were depending upon digital KYC (Know Your Client). But different organisations followed different methods and none of them was similar to each other. While some of them permitted users to record a video instead of in-person verification (IPV), the maximum of the stockbrokers had sent an agent to the client to get IPV done.
The government and capital markets regulator Securities and Exchange Board of India (SEBI) has resolved to ease KYC regulations and maintain a particular standard. Venu Madhav, chief operating officer of Zerodha, a medium of online broking stated that SEBI made an analysis of the current procedure and have set a benchmark for digital KYC completion.
Aadhar Based KYC
The finance ministry released a bulletin on April 22 to ensure that the complete KYC process is digitalised for transactions through some entities. Nine organisations are now authorised to Aadhar authentication or Aadhar based e- KYC. The entities include BSE Ltd and National Stock Exchange, Central Depository Services (India) Ltd, CDSL Ventures Ltd, CAMS Investor Services Pvt. Ltd and Link Intime India Pvt. Ltd.
Some online platforms that have been allowed for digital KYC are:
Aadhar e- sign
This has been authorised by the government and is considered analogous to a pen and paper signature. It’s is being done by a one-time password (OTP).
SEBI has allowed the users to retain digital copies of driving licence, Permanent Account Number (PAN), Aadhar, vehicle registration, mark sheet, ration card and other important documents. They are of equal importance as the original ones.
In this process, the client shows the needed documents to the broker’s representative in a video call.