DoT clears Aadhaar-based KYC norms for telcos

The Department of Telecommunications (DoT) has cleared another long-pending demand of the telecom industry by enabling the industry to carry out electronic know your customer (eKYC) norms using Aadhaar. A customer's Aadhaar card and fingerprints will now be adequate to validate and activate new prepaid and postpaid connections.

Currently, customer acquisition is a cumbersome process for telecom service providers and consumers. Several forms are to be filled out and proof of identification is to be provided to telecom operators and these records are maintained in the physical form by the operator. The telecom operator, then, has to authenticate the customer through a tele-verification process. With the DoT paving the way to carry out eKYC, the industry will be able to issue a SIM to a consumer on the spot, once the Aadhaar verification process and biometric test is complete.

Commenting on the move, DoT Secretary J S Deepak said: "The move will positively impact the consumer as well as the telecom operators. Consumers can now get activated SIM cards in a single visit, while operators are sure about the identity of the consumer through his or her Aadhaar number. The move is a part of the government's initiative towards ease of doing business in India."

Every year, the telecom industry acquires 80 million subscribers and 240 million sheets of paper are used in the KYC process. With this one move, at least 50,000 trees (that is what 240 million sheets of paper are made of) will be saved. The move is environment-friendly and will become par for the course for the industry, believes Deepak. The entire system will be automated end-to-end.

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What is electronic KYC?
Electronic KYC is a process through which telecom operators will be able to enrol subscribers, by capturing their biometric details (thumbprint or iris scan) and Aadhaar number to authenticate the identity of the person

How does it impact the consumer?
The consumer can simply walk into a sales point or retail store of a telecom operator and share biometric details with Aadhaar number and walk out with an activated SIM

How is the KYC process done at present?
At present, a subscriber has to walk in with ID, address proof and fill out several forms. The SIM is activated only after 24-48 hours, once tele verification is done by the telco

Why is e-KYC good for telecom operators?
eKYC is good for operators as the new process will save them 240 million pages of documentation a year. It makes it easier and simpler to acquire customers and do business
The industry has long been asking for this measure as it makes customer acquisition easier for the operators. Welcoming the move, Gopal Vittal, managing director and chief executive officer (India & South Asia) at Bharti Airtel, said the company would start rolling out Aadhaar-based eKYC solutions this week itself.

Vodafone had partnered with DoT to pilot Aadhaar-based eKYC and tested it successfully in two circles. Sunil Sood, managing director and CEO of Vodafone India, said: "The advantage of the eKYC solution is manifold with all stakeholders - customers, operators and regulator benefiting from it. For the consumer, instant activation means better experience and security of his personal confidential information. For Vodafone, it will improve quality of sales as well as regulatory compliance. For the regulator, it not only means a green initiative but also hassle-free governance and accurate audit results."