Ever ponder how a bank can approve a personal loan within a few hours, or even minutes, after an application? Does the lender have so much faith in you, or is it because the bank knows you personally?

That may be the case, but the lender can verify a borrower's profile through a background process. The electronic process to Know Your Customer, or eKYC, is the name given to this procedure.


Usually, an OTP (one-time password) is sent to the customer's Aadhaar-connected mobile phone.

eKYC is frequently used by banks to onboard clients for a variety of services, including banking, loan applications, and personal information verification.

How it works

1. At the outset, a customer gives his/her Aadhaar number and gives his/her consent to the service provider to access data.

2. After the consent is given, service providers can access the UIDAI (Unique Identification Authority of India) database.

3. It’s at the database, the service provider is authorised to verify the customer's identity, address, and other demographic details.

4. Finally, customer's details are securely stored

Since the entire process happens online via an SMS, it is instant and does not require the applicant to submit any documents such as address proof and others.

NPCI describes the entire process of e-KYC through these steps.