After the Unique Identification Authority of India (UIDAI) asked the mutual funds industry, registrar and transfer agents (R&Ts) and online distributors to discontinue with Aadhaar-based know your customer (KYC) verification, companies are trying to explore other digital solutions to continue paperless KYC. A few companies are considering using DigiLocker accounts as an alternative.
DigiLocker is a facility provided by the government, as part of its Digital India initiative, which allows you to avail dedicated cloud storage space up to 1 GB free of cost. While you have to provide your 12-digit Aadhaar number to open the account, the Aadhaar data will not reside with the asset management company.
The DigiLocker account allows you to store the scanned copies of all your documents on the cloud and provides access to these when required. Once you have the account, you can either upload the documents yourself or contact companies and organisations registered with DigiLocker and they can directly push electronic copies of documents such as driving licence, voter ID, school and university certificates and PAN card into your account. It makes sense to get organisations to put your documents in the account directly, as that assures the authenticity of documents.
You can access the documents anywhere any time through the DigiLocker app on your smartphone or by signing into your account on your laptop. You can also save the relevant document on a device and get a printout, if required.
DigiLockers also allow account holders to electronically sign their documents using the eSign facility making self-attestation easier.
For mutual fund companies or other organisations willing to do online verification, DigiLockers can make the processing faster.
The facility keeps your documents secure. The documents reside in the cloud and are secured by a 4-digit personal identification number to prevent unauthorised access. DigiLocker app has adopted the Aadhaar OTP feature which means each time you wish to log into your account, you have to enter an OTP sent to your mobile phone. The facility is useful but it’s still in its early stages. According to the DigiLocker website, the facility currently provides access to 3.36 billion digital documents.