The Government of India launched the Aadhaar card in 2010 to enable people to enjoy certain services in both the public and private sectors. Aadhaar number is a unique 12-digit number provided by the government to all Indian citizens by collecting their iris scan and fingerprints.
Aadhaar card not only serves as proof of citizenship but also helps individuals to get loans, open bank accounts, buy SIM cards, get Permanent Account Number (PAN) cards, apply for passports and file their income tax returns.
Impact of Aadhaar Card on Personal Loan
Individuals who wish to avail any financial services must submit their Know Your Customer (KYC) documents. The government has made it mandatory for financial institutions and banks to collect customer KYC details to prevent money laundering. Earlier, KYC required a lot of documents, however, nowadays it is very easy to complete KYC. Banks have also started e-KYC, where the entire KYC process is digitized. As Aadhaar contains biometric data of individuals, verification is an easy and quick process.
Personal loans are taken by individuals mostly for emergency purposes. Therefore, they will need the verification process to speed up and the loan amount to reach their bank account at the earliest. The main objective of Aadhaar card is to speed up the process. KYC verification has gone digital and getting a personal loan has become very easy. The personal details of the individual are found in the Aadhaar database, so it takes less time to approve the loan.
Method of using Aadhaar to apply online for personal loan
Although it is not mandatory for individuals to provide their Aadhaar card, it is very easy to get a personal loan using it. If Aadhaar details are provided by the borrower then the process of completing the verification is easy for bank employees. There is also a paperless mode in which documents can be submitted online known as e-KYC. In case of e-KYC, no physical documents need to be submitted by the individual. Various banks also provide instant loans if the borrower uploads the scanned copy of Aadhaar card.
List of Non-Banking Financial Companies (NBFC) and Banks that use Aadhaar Card as the main proof of identity
HDFC Personal Loan
SBI Personal Loan
Indiabulls Personal Loan
ICICI Personal Loan
PNB Personal Loan
Capital First Personal Loan