03 June 2024 | By INDIE
Digital Banking offers optimal convenience when you are able to carry out all your banking transactions and cater to all your financial needs from the comfortable setting of your home. This, however, may fall short if, at the very first stage of your banking experience, you are required to run to the bank for various formalities. Opening your account with physical documents or with EKYC requires a visit to the branch.
You would have heard of various similar but confusing terms like E KYC Online and video KYC when you go to open bank account online. Let us learn about these and their differences.
Also Read: More about Digital Savings Accounts
KYC or Know Your Customer is the name of the process set down by the RBI for banks and financial institutes to enable verification of customer identity. The process followed during the opening of an account may be of two types – full KYC or half KYC, depending on the method followed.
1. Full KYC is done by physically verifying documents. Identity proof and address proof of a customer may be ascertained from documents such as passport, PAN card, and Voters ID card, as listed by RBI.
2. Aadhaar is not a compulsory document in full KYC. It is your choice whether or not you wish to use it.
3. Completion of full KYC usually requires you to physically visit your bank branch and remove all restrictions from your bank account that may have been applied in the absence of KYC
Half KYC is also known as EKYC. This involves you voluntarily providing your Aadhaar and PAN. Usually, an OTP is also required. This has been the most popular way to open a bank account online.
Opening a bank account using e-KYC has both benefits and restrictions:
1. You may start using your new account instantly
2. You may be issued a virtual debit card for use online
1. There are restrictions on the maximum credit to an account and the balance in the account. Your balance cannot be above Rs 1 lakh at any given point. Also, the total credit to your account in a financial year cannot exceed Rs 2 lakh.
2. You need to compulsorily convert your half KYC account to a full KYC account after a year of using it.
3. Issuance of chequebooks is not allowed, and cash deposits may be restricted.
The Reserve Bank of India introduced the concept of online Video KYC in January 2020 via an amendment dated January 9th, 2020, to its Master Direction on KYC. Video – KYC is considered to be an equivalent process to full KYC.
This is now one of the most popular methods used to open a digital savings account and is subject to the following:
1. Stable internet connectivity
2. Smartphone or laptop with internet connection
3. Camera in your laptop or smartphone.
Video-KYC provides you with the experience of alignment of the process of account opening with digital banking as it should be in today’s age.
The RBI mandates the following in the process of opening a digital savings account:
1. A live photo of the customer needs to be captured.
2. Live location – the customer's latitude and longitude while capturing the photograph need to be recorded.
3. Images of the officially valid documents or equivalent e-documents as mandated by RBI need to be captured.
4. The proof of possession of Aadhaar.
5. PAN or e-PAN.
Click here to open INDIE’s Digital Savings Account
Also read: Mastering Digital Savings
Video-KYC provides you with a truly digital futuristic banking experience, with the convenience of opening the account from your home and not having to submit physical documents. You may apply for your account at any time of the day and the bank will schedule a video call at mutual convenience. You may access all the provided features once your account is activated.
