Aadhaar for KYC

Soon you will need your Aadhaar details to start investing and for all financial transactions, with the government deciding to introduce Aadhaar-enabled know your customer (KYC) regime across financial sector. The move comes on back of the government making Aadhaar mandatory for PAN application and at the time of filing tax returns. The Aadhaar e-KYC will be quick to get through, with updated contact details. The Aadhaar-based KYC will take care of redundancies and check on frauds, in case of individuals with multiple PAN. The remaining loopholes in the system will get sorted, which will also bolster the case of a single KYC across the spectrum of available financial instruments.

The move will give boost to Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI), which is the agency with the mandate to generate unique C-KYC number (central-KYC). This number will be used across all financial products including bank accounts, mutual fund investments, demat accounts and insurance policies. This appears to be finally the route towards streamlining investments and financial services, with a similar KYC process than the different benchmarks that were earlier being used. Moreover, for providers of financial services, this move will help them focus on their core business by reducing the costs it otherwise entails in the KYC process.

olmdesk@outlookindia.com