InvestorQ : Is it possible to open a trading account with authentication via Aadhar card issued by the UIDAI? Are there any specific conditions in this case?
Khushi Patel made post

Is it possible to open a trading account with authentication via Aadhar card issued by the UIDAI? Are there any specific conditions in this case?

Arya Nanda answered.
3 years ago

If you have opened a trading and demat account in the past you would be familiar with the long winding documentation process involved. To begin with there was the client agreement form which nearly ran into 60 pages and you hardly had to time to read through the fine print. Then the broker will ask you to sign physically on each page of the agreement in addition to the assigned signature slots. Then you had the arduous task of signing across your photograph and then take photocopies of your key documents and also self-attest it. The entire account opening process took around 4-5 days before the trading account could be actually activated. Then the user name and PIN would be mailed to your address physically and only after that you could initiate your trades. Now all that has changed substantially and changed for the better. Welcome to the world of Aadhar based authentication of your account opening…

What is Aadhar based account opening

Today the government has made it mandatory to provide your Aadhar number for almost every activity. Aadhar is a 12-digit unique number assigned to each individual and is issued by the UIDAI. The Aadhar is a biometric record which means that it records your unique fingerprint copy along with the details pertaining to your name, age, address etc. Since your finger print is unique to you, this biometric data can be used to authenticate your identity before opening your trading and demat account. Aadhar based account opening makes the entire process of account opening seamless, hassle-free and almost paperless. Let us understand the merits of the Aadhar based account opening.

What are the benefits of Aadhar based account opening

Aadhar based authentication for your trading and demat account is advantageous in a variety of ways. The entire account opening process can be completed end-to-end in just around 15-20 minutes. It is convenient because you do not have to go through the hassle of filling up the form. Since your personal data is already stored in the Aadhar database, your entire data is directly captured from the Aadhar database itself. This avoids duplication of efforts. Since this comes with an auto-filled KYC form you can use your Aadhar card to digitally identify yourself. Most importantly, this is a 24X7 activity. You can even complete the entire account opening formality in the middle of the night. It is as simple as that!

What are the pre-requisites of paperless trading and demat account opening

Before understanding the process, it is essential to understand the pre-requisites for Aadhar based authentication of your trading account. Firstly, you must have a valid Aadhar card and your biometric data must be stored in the Aadhar database. Secondly, you ensure that the data in your Aadhar card is updated as all that data is directly imported into your trading account. Thirdly, ensure that your mobile number is mapped to your Aadhar and you will have to use the same mobile number in your trading account too.

Understanding the process for Aadhar based trading account opening

To open your paperless account you first need to go to your broker’s website and fill up the small form with basic details. Then the website will ask for your Aadhar card number and you will be required to validate this Aadhar id with an OTP (one-time password) sent to your registered mobile number. Once the Aadhar is authenticated with the OTP, then the website will fetch all your personal details and particulars from the Aadhar database and populate your trading account form. You do not even require a digital signature since you can authenticate with your Aadhar signature itself. Most brokers insist on transferring funds into your account, which is refunded back to you once the account is opened. This is just to ensure that only the serious customers come for this authentication. That completes your account opening process and you are ready to trade in 15-20 minutes from the time you start.

Having completed the Aadhar based authentication, am I ready to trade?

While the account has been opened post the authentication, there are some additional procedures before you can actually start trading on that account. Firstly, you need to complete in-person verification (IPV). This can either be done through a video-cam on your PC or you can walk into the nearest authorized service centre and get the IPV done. If you intend to only open a cash market account, then you need to just send soft copies of your PAN card and a copy of the cancelled cheque of your bank mandate. The cheque leaf should have your name printed on the cheque for it to be valid. For F&O traders, the broker will also insist that you mail your bank statement or the Income Tax returns of the last 2 years. After this is completed, there is still one small process left. You need to download the Power of Attorney agreement from the website, execute the agreement and mail it back to the broker. This is essential for you to be able to operate your demat account seamlessly.