Loans From Non-Banking Financial Companies: Permissions Granted To NBFCs To Use KYC Mandated By Banks Using Aadhaar For Sanctioning Loans
There are times when people have some urgent requirement for some extra cash. This financial crisis could be due to a medical emergency, an outstanding loan, or the educational requirements of children. Whatever the reason may be, the quickest way to avail the required money would be to apply for a loan through a bank or a Non-Banking Financial Company (NBFC).
There are several NBFCs in India that provide loans for personal needs at good interest rates. The interest rates usually come in between 11% and 18% per annum.
Types Of Loans Provided By NBFCs
Loans provided by NBFCs can be broadly classified as:
- Secured Loans
These loans are sanctioned based on collateral security provided by the loan applicant. The collateral placed with the NBFC could be in the form of gold, property, and house, or fixed deposits.
- Unsecured Loans
NBFCs also provide loans without any collateral security. However, the financial companies take into consideration a few things like track records of the loan applicant and CIBIL Score.
Permission Granted To NBFCs To Use KYCs Mandated By Banks Using Aadhaar Authentication
The Ministry of Finance operating under the Government of India has granted permission to the NBFCs to use bank mandated Know Your Customer (KYC) using Aadhaar authentication. If you’ve got your KYC done at any bank you no longer have to undergo the same process again while applying for a loan through an NBFC.
Before this ruling came out every customer had to undergo the same KYC procedures each time they approached a different financial agency. Therefore the inconvenience the customers had to face until recently has been reduced to a great extent.
- Bank KYC authenticated using Aadhaar e-KYC can be used by NBFC’s while dealing with a loan application of the customer.
- The verification process need not be repeated each time the applicant approaches a different NBFC or bank.
- The process of onboarding a new applicant becomes simpler and quicker with this new decision.
- Amendments have been made to the rules attached to the Prevention of Money Laundering Act (PMLA) and regulation of Aadhaar that is connected to the e-KYC.
The PMLA Act (Prevention of Money Laundering Act) has been recently amended by the Government of India to permit Know Your Customer digitally. The amendments include:
- Clarification regarding the different modes through which an NBFC or a bank can collect the details of the customer electronically.
- Permission granted for financial companies to collect the complete details of the customer through Aadhaar e-KYC.
- The need for the submission of documents in the paper has been removed.
Main Features Of Loans From Nbfcs In General (Following The New Ruling By The Government Of India)
The following are some of the main features of loans provided by NBFCs
- Quick processing based on Aadhaar e-KYC.
- Minimum requirement of documentation.
- Online procedure and e-sign used loan application.
- Instant loan approval. The maximum time taken is 24 hours.
- The application process is secure and transparent enough.
The Major NBFCs In India
The following are some of the major NBFCs in India.
- Tata Capital.
- Muthoot Finance.
- Housing and Development Board (HDB) Finance.
- Bajaj FinServ.
- Mahindra Finance.
- Kosamattam Finance.
- Aditya Birla Capital
The new ruling by the Government of India has made the process of applying for a loan through an NBFC much simpler and the loan amount gets sanctioned and transferred to your account in no time.
For more information contact us.
We, Finahub, are experts in Aadhaar related products and services like eSign, eKYC, Authentication, etc. If you want to know how your enterprise can start using it, please give us a call @ 0484 2388285 or email us at [email protected]