Electronic authentication for 'Know Your Customer' (e-KYC) through Aadhaar will give a push to the banking industry by reducing the time for entry of a customer in the banking system. According to a report in The Business Standard which quoted sources from various facilitators such as National Payments Corporation of India (NPCI), Mastercard and Visa, pilot studies for e-KYC in the financial systems are underway and based on the results, a full fledged launch of the system is expected in December, 2013.

The report quoted Sumanth Kathpalia, IndusInd bank as saying that the facility would get a lot of people from the unbanked rural areas of India into the banking fold. At present the KYC process takes anywhere around five to seven days; in addition, the customers have to physically come to the bank and produce different kinds of identity documents.

With e-KYC, the customers will be able to authenticate themselves through Aadhaar and thus could open their accounts online. The report said that the time taken to authenticate a customer would be reduced to three days with e-KYC.

E-KYC would also be beneficial for the insurance sector. The report quoted K G Krishnamoorthy, Future Generali India Insurance as saying that e-KYC will lead to less documentation and will save time as all the processes could be done online.