SEBI Approves NPCI’s e-KYC Setu System for Aadhaar-Based KYC

PR No.35/2025, Dated: 30.06.2025

1. Background – Aadhaar-Based e-KYC in the Securities Market

Registered intermediaries in the securities market—such as stockbrokers, mutual fund distributors, and portfolio managers—are currently permitted to use the e-KYC services offered by the Unique Identification Authority of India (UIDAI) to perform Aadhaar-based digital Know Your Customer (KYC) verification. This digital approach enhances efficiency, reduces paperwork, and streamlines the onboarding of investors.

2. New Development – Introduction of e-KYC Setu System

To further promote ease of doing business and strengthen digital infrastructure, the Securities and Exchange Board of India (SEBI) has now permitted intermediaries to use the ‘e-KYC Setu System’. This system has been jointly developed by the National Payments Corporation of India (NPCI) and UIDAI.

3. What Is the e-KYC Setu System?

The e-KYC Setu System is a digital interface designed to facilitate:

• Seamless and secure customer onboarding, and
• Efficient performance of digital KYC procedures.

It acts as an additional mechanism alongside UIDAI’s existing e-KYC services and supports end-to-end digitisation of the KYC process for securities market participants.

4. Key Benefits of the e-KYC Setu System

• Enhanced operational efficiency for intermediaries
• Faster investor onboarding with reduced manual intervention
• Improved user experience through seamless digital interactions
• Strengthened compliance with regulatory KYC norms

5. Conclusion

With the introduction of the e-KYC Setu System, SEBI continues to advance its agenda of digitisation and regulatory simplification in the securities market. This move is expected to significantly benefit both intermediaries and investors by offering a more flexible and secure digital KYC solution, thereby contributing to financial inclusion and market participation.

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