SEBI Allows Use of e-KYC Setu: What It Means for You

To give relief to the Indian investors, the SEBI (Securities and Exchange Board of India) has simplified the KYC process by allowing the registered intermediaries to use the e-KYC Setu System that is being developed by the National Payments Corporation of India (NPCI).

The introduction of this new system will give an additional digital option for Aadhaar-based e-KYC, alongside the current mechanisms like UIDAI's e-KYC services and Digilocker.

Now, let's see what precisely this new e-KYC Setu is in the next heading.

What is the E-KYC Setu System?

In simpler words, e-KYC Setu is a digital identity verification system, which is developed by the NPCI (National Payments Corporation of India) in partnership with UIDAI.

It is an advanced reporting mechanism that is regulated by the RBI (Reserve Bank of India) or SEBI, to double check the authenticity of the customers without disclosing the Aadhaar numbers.

In another report, NPCI states that, "This new e-KYC Setu system will improve the complexity of the onboarding and limits the handling of the sensitive Aadhaar data."

The e-KYC Setu will give you flexibility in choosing the right tech platform based on a firm's specific use case.

Also Read: Why it is important to complete your KYC on time?

What is e-KYC Setu used for?

Well, all the SEBI registered intermediaries such as stock brokers, Mutual Funds distributors, portfolio managers and investment advisors can use the new e-KYC Setu system to streamline the online KYC process. It can be an alternate channel to complete the Aadhaar-based KYC of their investors.

What are the Benefits of the E-KYC Setu System?

The new mechanism streamlines customer onboarding and cuts down the compliance burden. Entities can also sign up quickly through NPCI's single-window onboarding system.

SEBI announced this move in a circular as part of its efforts to improve the ease of doing business in the financial sector.

Also Read: Small Savings Rates Unchanged for Q2 FY26: Details Here