Know Your Client Requirements - Clarification on voluntary adaptation of Aadhaar based e-KYC process
Summary
This circular clarifies that the use of Aadhaar-based e-KYC is voluntary for clients, following Supreme Court directives. It outlines the operational procedures for intermediaries to verify client identities using UIDAI services through KYC Service Agencies. The document specifies authentication methods, including biometric and OTP-based verification, subject to certain conditions.
Text
The usage of the Aadhaar card as issued by the Unique Identification Authority of India (UIDAI) is voluntary and optional, subject to the final judgment of the Hon’ble Supreme Court.
The intermediary shall perform verification of the client with UIDAI through biometric authentication (fingerprint or iris scanning).
Mutual Funds can also perform verification of the client with UIDAI through One Time password (OTP) received on client’s mobile number or on e-mail address registered with UIDAI provided, the amount invested by the client does not exceed Rs. 50,000 per financial year per Mutual Fund and payment for the same is made through electronic transfer from the client’s bank account registered with that Mutual Fund.
PAN of such client is to be verified from the income tax website.
The intermediary shall upload this KYC information on the KRA system in terms of KRA Regulations.
In case material difference is observed either in the name (as observed in the PAN vis-a-vis Aadhaar) or photograph in Aadhaar is not clear, the intermediary shall carry out additional due diligence and maintain a record of the additional documents sought pursuant to such due diligence.
The records of KYC information so received shall be maintained by the intermediary as per the SEBI Act, Regulations and various circulars issued thereunder.
Source: SecMarx — Know Your Client Requirements - Clarification on voluntary adaptation of Aadhaar based e-KYC process. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.