India is going digital. Whether it is shopping, transacting, opening accounts, investing or filling application forms, you can do most things online. You can manage your money from your smart phone. The ‘Amazonification’ of personal finance is happening now. If you can buy any product instantly on e-commerce websites, why can’t you similarly buy financial products? For many financial products, it is important for the financial institution to make an in-person verification of the applicant, collect paper documents, and take a ‘wet’ signature on the application. A ‘wet’ signature is one you make with a pen by hand. It is a unique personal identifier for you. But with evolving technology, we have e-Signatures today. For a truly digitized purchase of financial products such as loans, we need e-Signs to be collected from the customer. This isn’t a sci-fi dream. Already, millions of documents are being signed electronically. E-Sign will be a great leap in personal finance. How much do you know about it?
What is an Aadhaar e-Signature?
The Aadhaar e-signature is a unique electronic identifier based on your Aadhaar data. It is an encrypted signature which you can use to electronically sign documents and agreements. It can be used only with the consent of the Aadhaar owner. It is instant, convenient, and legal. And it will replace the ‘wet’ signature which is of no use in a digitized documentation process.
What is required for getting an e-signature?
You need your computer, a working internet connection and your Aadhaar details to get an e-signature. The e-Sign service is integrated with service delivery applications, through an open API to create the e-Signature. Your Aadhaar details are verified and e-KYC is done. Once you are authenticated, your e-signature is generated. You can also use your smartphones to generate an e-sign.
Is the signature acceptable?
The legality of an e-signature has been accepted under Section 5 of the Information Technology Act 2000. Furthermore, the Government of India had notified the Electronic Signature or Electronic Authentication Technique and Procedure Rules, 2015 which validate e-signatures. Even the Indian Evidence Act, 1872 validates e-signatures under Sections 47A, 67A, 73A and 85B.
Impact of e-signatures on personal finance
By making signing documents such an easy task, e-signatures are sure to make a positive impact in personal finance. With an e-sign, you can complete your purchase of a financial product without having to step into a bank branch or meet their representative. The processing and waiting time is reduced. The documentation is paperless and lowers costs at the bank’s end.
E-Sign can’t be Forged
While physical signatures are prone to forgeries, e-signatures are secure. They are unique in nature and only you can e-sign your documents. Thus, the threat of forgeries and frauds using your signatures would be removed.
Greater Financial Inclusion
Customers in far-flung and remote areas would be highly benefitted from the facility of e-signatures. They would not have to locate physical branches of financial institutions to get the required forms and applications for transactions. They can go online to open accounts that would help them save, invest, insure and borrow. They would be able to do so easily through e-signatures. The penetration of banking and investments would increase in remote areas where people have smartphones and can e-sign using their smartphones. This would make it easier for people in such areas to invest and bank more.
Given the numerous benefits of e-signatures, it is no wonder that these signatures are all set to bring a revolution in your banking and investment habits. Since a vast majority of Indians now have Aadhaar, an e-sign via Aadhaar can be obtained easily.
(The author is CEO, Bankbazaar.com)