SEBI Approves e-KYC Setu to Simplify Digital Onboarding in Securities Market

In a major step towards digital ease, the Securities and Exchange Board of India (SEBI) has approved the use of “e-KYC Setu,” a new Aadhaar-based identity verification system developed by the National Payments Corporation of India (NPCI). This move is expected to make onboarding in the securities market faster, safer, and more efficient.

What is e-KYC Setu?

e-KYC Setu is a privacy-focused digital identity verification solution developed by NPCI in partnership with the Unique Identification Authority of India (UIDAI). It offers an additional alternative to the existing Aadhaar e-KYC methods such as UIDAI’s own services and Digilocker.

One of its standout features is that it verifies customer identity without revealing or storing their Aadhaar number. This adds a layer of privacy protection while ensuring compliance with KYC norms. The system is designed for ease of use, allowing financial firms to onboard customers without handling sensitive data directly.

Who Can Use It?

All SEBI-registered financial intermediaries can now use e-KYC Setu. This includes:

• Stockbrokers
• Mutual fund distributors
• Portfolio managers
• Investment advisors

These entities can now adopt e-KYC Setu alongside existing KYC methods to verify customer identities during account opening or investment onboarding.

Benefits of e-KYC Setu for Investors and Firms

For investors, e-KYC Setu means a quicker and more seamless experience. Account opening and verification become faster, with fewer documents and less hassle.

For financial firms, the new system cuts down paperwork, simplifies compliance, and offers a streamlined onboarding process. NPCI also provides a “single-window” onboarding method, making it easy for institutions to adopt the platform.

Read more: Best Flexi Cap Funds in July 2025: Kotak Flexicap, Parag Parekh Flexi Cap and More Based on 3Y CAGR.

Conclusion

SEBI’s approval of e-KYC Setu supports its broader agenda of improving the ease of doing business in India’s financial sector. With better privacy safeguards, quicker processing, and less red tape, e-KYC Setu is poised to modernize KYC practices and enhance participation in the securities market.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.