Union Budget 2023: Govt to expand scope of DigiLocker, simplify KYC process, says FM Sitharaman

Union Budget 2023: Union Finance Minister Nirmala Sitharaman, while presenting the last full Budget of the current government, proposed to set up an Entity DigiLocker for use by MSMEs, large business and charitable trusts. This is in line with its aim to expand the scope of DigiLocker. 

"This will be towards storing and sharing documents online securely, whenever needed, with various authorities, regulators, banks and other business entities," the FM said.

She further added that a one stop solution for reconciliation and updating of identity and address of individuals maintained by various government agencies, regulators and regulated entities will be established using DigiLocker service and Aadhaar as foundational identity.

To enable more Fintech innovative services, the scope of documents available in DigiLocker for individuals will be expanded, FM Sitharaman said.

"Fintech services in India have been facilitated by our digital public infrastructure including Aadhaar, PM Jan Dhan Yojana, Video KYC, India Stack and UPI."

DigiLocker is a flagship initiative of Ministry of Electronics & IT (MeitY) under Digital India programme. DigiLocker aims at ‘digital empowerment’ of citizen by providing access to authentic digital documents to citizen’s digital document wallet.

The issued documents in DigiLocker system are deemed to be at par with original physical documents as per Rule 9A of the Information Technology (Preservation and Retention of Information by Intermediaries providing Digital Locker facilities) Rules, 2016 notified on February 8, 2017 vide G.S.R. 711(E).

DigiLocker has so far onboarded over 14.6 crore individuals on the platform, and issued over 5.6 billion documents.

During the Budget 2023-24, it was also announced that the know-your-customer (KYC) process will be simplified adopting a ‘risk-based’ instead of ‘one size fits all’ approach.

"The financial sector regulators will also be encouraged to have a KYC system fully amenable to meet the needs of Digital India," FM Sitharaman said.

"KYC will be simplified basis risk-based approach to support Digital India is a good move. Each financial regulator will now review and release updates to master KYC. National data governance policy for access to anonymous data will enable public goods for big data," Adhil Shetty, chief executive officer (CEO) and co-founder of Bankbazaar.com and co-chair, FICCI Fintech Committee, said.

"With KYC norms set to get simplified, it helps both financial institutions and consumers to save time, effort and money due to a quick digitisation process," AR Ramachandran, Tips2trades, stated.

Also Read: Budget 2023 LIVE updates: FM Nirmala Sitharaman's media briefing to take place at 4pm