KYC is a mandated verification procedure used by financial organisations to validate a customer's identity. With increased digital use, eKYC and CKYC have emerged as the two most popular options for meeting this requirement. This article describes the differences between CKYC and eKYC, and how each approach applies to various financial services. Understanding the differences between eKYC and CKYC enables users to choose the approach that best meets their onboarding requirements.
Key Takeaways
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eKYC enables digital Aadhaar verification using OTP or biometrics.
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CKYC keeps a single client record that may be utilised at multiple organisations.
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The primary differences between CKYC and eKYC are verification methods, speed, and long-term use.
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Both approaches provide rapid and safe onboarding in banking, stock markets, and fintech.
What is eKYC?
Electronic Know Your Customer (eKYC) is a digital verification process that uses Aadhaar information to confirm a person's identity. The eKYC procedure usually begins when a consumer gives approval and submits their Aadhaar number to a portal.
An OTP is sent to the phone number linked to Aadhaar, or biometric data such as fingerprints or iris scans are taken at authorised premises. Once validated, basic KYC information such as name, address, date of birth, and photograph is securely transmitted to the institution, completing verification in real-time.
eKYC is widely used by banks, stockbrokers, mutual fund platforms, insurance firms, NBFCs, and fintech apps to facilitate speedy and paperless onboarding. It is especially useful for setting up bank, investment, demat, and digital wallet accounts.
Features & Benefits of eKYC
Electronic KYC has several features and benefits, including:
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Digital Verification in Real Time: Customers may use biometric authentication or Aadhaar OTP to complete identity verification in a matter of minutes using eKYC, facilitating quicker account setup and service access.
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Authentication Based on Aadhaar: Since the process is directly connected to UIDAI information, it guarantees precise identity matching and lowers the possibility of mistakes or impersonation.
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Paperless procedure: eKYC makes the verification procedure entirely digital and convenient by doing away with the need for paper documents, forms, or branch visits.
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Secure and Compliant: Encrypted systems authenticate data, ensuring maximum security and regulatory compliance.
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Extensively Used in Financial Services: For faster customer onboarding, banks, stockbrokers, mutual fund platforms, insurance businesses, and fintech applications often use eKYC.
What is CKYC?
CKYC, or Central KYC, is a government-backed system that aims to provide a single, uniform Know Your Customer record for individuals who use financial services in India. It enables users to complete KYC once and utilise the same verified information across numerous financial institutions, like banks, mutual fund houses, NBFCs, insurance firms, and stock brokers.
The primary objective of CKYC is to eliminate multiple KYC submissions while creating additional bank accounts. Once a consumer has completed the CKYC procedure with any regulated organisation, their verified identification information is uploaded to a central repository controlled by the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI). Following verification, the customer is granted a unique 14-digit CKYC number.
CKYC operates by gathering basic identification and address papers, such as PAN, proof of address, and a photograph, during the first onboarding process. The financial institution verifies all of these details, which are then securely saved in the central database. With the customer's approval, other institutions can later access this information using the CKYC number. The system assures uniformity, enhances compliance, lowers redundancy, and streamlines long-term onboarding in the banking sector.
Features & Benefits of CKYC
Central KYC has the following benefits:
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Single KYC record: CKYC generates a single verified client profile that can be accessed by numerous financial institutions, eliminating the need to submit papers again.
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14-digit CKYC number: Every registered individual is assigned a unique CKYC number, which allows institutions to instantly obtain verified KYC data.
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Centralised Repository: Customer information is securely maintained in a government-backed database to ensure consistency and regulatory compliance.
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Smooth Onboarding Across Institutions: Once completed, CKYC enables faster account opening with banks, NBFCs, mutual fund companies, and insurance providers.
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Reduced Documentation: CKYC reduces paperwork by enabling the reuse of current KYC data, making it more convenient for consumers.
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Improved Compliance and Transparency: Standardised KYC records enable financial firms to meet regulatory requirements while eliminating duplication and verification errors.
Key Difference Between eKYC and CKYC
eKYC and CKYC differ primarily in how identity verification is carried out and how the confirmed information is used by financial institutions. The table below compares CKYC vs eKYC based on verification technique, speed, procedure, and use. The difference between CKYC and eKYC explains whether the approach is appropriate for a certain onboarding requirement.
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Parameter |
eKYC |
CKYC |
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Core objective |
Quick identity verification |
Single, reusable KYC record |
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Verification method |
Aadhaar-based OTP or biometric authentication |
Document-based verification stored in a central registry |
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Primary use cases |
Bank accounts, demat accounts, and fintech apps |
Banks, mutual funds, NBFCs, insurance |
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Validity |
Full KYC (if Biometric); Limited KYC (if OTP-based without video verification) |
Valid across multiple financial institutions |
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Process |
Fully digital and real-time |
One-time submission, then reusable across institutions |
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Document requirements |
Aadhaar only |
PAN, address proof, identity proof |
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KYC identifier |
No unique number issued |
14-digit CKYC number |
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Government body involved |
UIDAI |
CERSAI |
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Speed |
Instant or near-instant verification |
Takes longer as documents are verified and uploaded |
Also Read: Aadhaar e-KYC
Which is Better: eKYC or CKYC?
Neither eKYC nor CKYC is universally better. Each serves a certain purpose. When you compare CKYC vs eKYC, eKYC is appropriate for speedy, digital onboarding since it allows for instant identification verification using Aadhaar. CKYC is more suited to long-term usage since it generates a reusable KYC record that can be utilised by numerous financial institutions.
When comparing CKYC to eKYC, eKYC prioritises speed and convenience, whereas CKYC focuses on uniformity, compliance, and repeat usability across banking, investing, and insurance services.
Also Read: Aadhaar Authentication VS Aadhaar eKYC
How eKYC & CKYC Impact Banking, Stock Market & Fintech
In India's financial ecosystem, eKYC and CKYC have an important role in enabling fast, compliant onboarding. While CKYC enables banks to reuse authorised customer data for future services without duplicating documents, eKYC in banking facilitates the quick establishment of savings and current accounts with Aadhaar-based OTP or biometric verification.
eKYC facilitates rapid demat and trading account activation in the stock market, enabling investors to start making transactions without the need for paper documentation. Conversely, CKYC guarantees that brokers, mutual fund platforms, and depository participants can all utilise the same verified identification.
CKYC is frequently used in mutual funds and insurance to keep a single, uniform KYC record that is compatible with insurers and asset management firms. While CKYC promotes long-term compliance and data consistency, fintech applications mostly rely on eKYC for quick digital onboarding. CKYC and eKYC differ in terms of speed as opposed to reusability, and both methods work in tandem to guarantee effectiveness and legal compliance.
Also Read: Difference Between Demat And Trading Account
Conclusion
eKYC and CKYC together make up the foundation of India's digital identity verification system for financial services. While both serve the same overall function of customer verification, they fulfil different operational requirements inside the system. One allows for quick digital access to financial services, while the other ensures consistency and continuity throughout long-term financial relationships. Their coexistence enables institutions to strike a balance between convenience and regulatory accountability.
