Know Your Customer (KYC) verification for customer onboarding by financial institutions

Digital ID is used to complete know your customer (KYC) verification during customer onboarding across banks, non-banking financial companies (NBFCs), such as microfinance institutions (MFIs), payment service providers, and FinTech companies. Aadhaar-based electronic know your customer (e-KYC) has been operational since 2016. It allows regulated financial entities to verify customer identities electronically through multiple methods. These methods include online e-KYC through biometric or OTP authentication, and offline KYC through digitally signed XML file, which contain masked Aadhaar numbers and demographic details. The Reserve Bank of India (RBI) and the Unique Identification Authority of India (UIDAI) regulate this system. It enables instant, paperless customer verification and maintains compliance with RBI’s KYC norms and Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regulations. In January 2025, more than 430 million e-KYC transactions were carried out, with cumulative Aadhaar e-KYC transactions that exceeded 22.68 billion. In March 2025, 39.50 million successful e-KYC transactions were recorded through the Aadhaar Enabled Payment System (AePS) platform.