Aadhar based eSign: A Complaint way of signing digital loan documents

Aadhar based eSign: A Complaint way of signing digital loan documents
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Aadhaar eSign, Let`s talk about the present scenario, the fastest and the most compliant way to verify and certify electronic documents is E-signatures. For all types of loans sanctioned on or after 2nd September 2022 through digital lending flows, eSigns have been made mandatory (from a digital lending perspective). Flows through a fintech platform (as a lending service provider or LSP) are also considered. Below given is the list of loan documents that are required to be digitally signed:

  • Statement of Key Facts

  • Loan product summary

  • Sanction Letter

  • Terms and Conditions

  • Account statements

  • Privacy policy of the LSP/Digital Lending App with respect to the borrower's data.

Undoubtedly, the concept of ​​Aadhaar-based esign for signing forms online has revolutionized the loan process. The entire process of seeking a loan has become easier and more efficient for borrowers.

Which eSign is compliant with the Digital Lending Guidelines?

Understanding the importance of mandatory eSigns, the doubt people have is about the mode in which such signatures are to be made. The following eSigns are valid as per the IT Act, of 2000:

  • Aadhaar eSign (through any mode)

  • DSC Token eSign (conventional USB-based signatures)

  • PAN eSign

  • DocSigner

The other methods of obtaining e Signs, e.g. click wrap agreements, have become questionable and unreliable since the implementation of the Digital Lending Guidelines has come into light. The reason is, the Click wrap signatures are not audit-able and also lack trail. Adding on to the flaws, it becomes difficult to trace and ascertain the identity of the signatory. 

Hence eSign consent flow is more practical and efficient than a clickwrap agreement. It helps in meeting the requirement of sending digitally signed documents to the borrower's verified email or phone number.

Every step in the loan process has become smooth. With the help of Aadhaar eSign, borrowers can now approve, verify, and certify loan documents electronically. Thus eliminating the need for physical signatures and paper-based document exchange. Also, it has streamlined the loan process by adding the benefits of saving time, and reducing the likelihood of errors, leading to improved accuracy of loan documents.

ZoopSign’s Aadhaar eSign solution and its benefits

ZoopSign’s Aadhaar eSign API is a secure and convenient eSign service. It is focused on making the process of signing documents faster, more secure and more efficient. Individuals can sign documents online without having to mail documents or physically sign them. It enables electronically signing legally valid documents using Aadhaar number and biometric authentication.

There are multiple options available for Sign using aadhaar based esign but ZoopSign’s solution is an ideal, hassle-free and legally compliant way. An individual would have to go through an arduous identity verification process, in the other alternative.  ZoopSign’s Aadhaar eSign eliminates the process of obtaining hardware tokens, renewing the signature periodically, etc., these procedures are tedious. Any document can be instantly signed by entering the Aadhaar number and OTP.  Such a signature is not time-bound and is legally recognised. ZoopSign provides the best solution to get the signature remotely.

Why is Aadhaar eSign the most compliant way to execute loan documents?

An ideal solution for regulatory compliance: It is specified by the IT ACT in case of any particular law( including RBI regulations), it’s obligatory for the information to be verified through the unique signature of a person. The same would be satisfied if the esign is compliant with the IT Act. The following are the conditions for the eSigns to be compliant with the IT Act:

  • Signature creation data can be linked to the signatory

  • At the time of signing the signature creation data is under the control of the signatory

  • In case there are any alterations to either the signature or information, then the same should be detectable.

  • Considering the above requirements, Aadhaar eSign stands out as the most compliant method of obtaining electronic signatures. It’s tamper-proof, secure and backed by the Unique Identification Authority of India (UIDAI)​​.

  • Audit trail Presence: A record of all transactions and activities that have taken place in a system or process is termed an audit trail. In the context of a financial institution's digital documents, a virtual audit trail means a comprehensive and easily accessible record of all loan-related transactions and activities. This audit trail serves as evidence of compliance with digital lending policies and also a way of ensuring transparency and accountability in the lending process.

  • Capturing consent: Zoop Sign's Aadhaar eSign consent flow allows you to meet the ‘explicit consent’ standard required by Digital Lending Policies, as it involves a signatory's affirmative action by providing Aadhaar details to authenticate the signature.

    Use ZoopSign’s Aadhaar eSign service to make sure your company complies with the Digital Lending Guidelines!