March 2023

How do companies do background checks in India

How Do Companies Do Background Checks In India?

The importance of employee background checks for making informed hiring decisions is a force to be reckoned with. Background checks help employers verify the credentials, education, and work experience of the candidates, safeguard a business from fraud practices, and ensure that the onboarded candidates possess the required skills and qualifications for the job. 

Employers can screen the candidate’s profile from all aspects from education to employment to a criminal history check to avoid getting into legal trouble and ensure that the workplace is free from any risks or hazards.

Companies That Conduct A Comprehensive Background Check Reap The Following Benefits:

  • Good company reputation: Employees with a criminal history or a questionable work history could negatively impact the company’s reputation, leading to loss of business as well as brand image.
  • Enhanced employee retention: A thorough background check can help employers identify candidates who are more likely to remain with the company for a longer time, reducing the cost and time associated with recruitment and training.
  • Maintain compliance: Some businesses have specific regulations regarding employee background checks. Employers must comply with these regulations to avoid legal penalties and fines.

How Do Companies Do Background Checks In India?

Screening candidates has become much easier than it was before, all thanks to the digitization of public data i.e. NIDs, driver’s licences, and negative and proprietary databases for court record checks and criminal history. It typically takes 2 to 5 working days to complete the background verification. However, the time may vary depending on what level an organization wants to dig into the candidate’s background (mostly done for leadership positions). 

The checks are mostly conducted once a candidate clears all the rounds of the interview. The process starts with identity checks followed by employment checks by calling your last employer. Then, companies look into public databases (criminal records) for any illegal activity. Next, they dig education records to verify your degrees and certificates.

The Following Are Some Common Steps Involved In A Typical Background Check Process In India:

  • Identity verification: The first step in a background check is verifying the candidate’s identity through their government-issued ID card, such as a passport, driving licence, or Aadhaar card.
  • Education verification: The company may verify the educational qualifications of the candidate by checking with the university or board that issued the certificate or degree.
  • Employment verification: The employment history of the potential candidates is validated by contacting the HR department of their previous employers to confirm their job titles, responsibilities, and work duration.
  • Criminal record check: The company may conduct a criminal record check by checking criminal records with the negative and criminal record proprietary databases.
  • Reference check: The company may also conduct a reference check by contacting the candidate’s previous supervisors or colleagues to verify their work performance, behaviour, and character.
  • Address verification: The company may verify the candidate’s current and previous addresses to ensure they are accurate.
  • Credit history check: Companies can conduct credit history checks to validate a candidate’s hold on important aspects like money management, signs of financial distress, records of repayment of loans, etc.

In India, there is no one-size-fits-all approach when it comes to background verification. Different companies conduct background verification in different ways. 

Talk to sales - AuthBridge

Big private and mid-sized companies partner with leading third-party background verification companies in India like AuthBridge to do the checks mentioned above. Then there are small enterprises that prefer to have an in-house HR team do all the work. Government firms or PSUs run an extensive background verification process before offering the job.

Industries That Are Most Suitable For Background Checks In India

Industries where BGV checks are must

The process and extent of the background check may vary depending on the company’s policies, the level of the position, and the industry. No matter, if it is a small company or a big private firm, having a robust background verification framework in place, helps stakeholders to make quality hiring decisions as well as stay time-efficient and productive. 

Employee Background Verification With AuthBridge

Comprehensive and seamless background verification can enable a long-term relationship with the new hires and provide a welcoming and safe workplace. 

AuthBridge emerges as a strong third-party enabler to help HR teams get data-driven insights into candidate history and automate background verification journeys so that they can focus on personalization during and before onboarding and offer human connections where desirable. With robust verification and onboarding solutions, organizations can get better transparency and trust to retain great talent.

FAQs around Background Checks In India

A background check is a process used by companies to verify an individual’s identity, employment history, educational qualifications, criminal records, and other relevant details to ensure the person’s credibility and suitability for a job.

Companies conduct background checks to ensure they hire trustworthy and qualified individuals, mitigate risks, comply with regulatory requirements, and maintain a safe and secure workplace environment.

Common background checks include identity verification, employment history verification, educational qualification verification, criminal record checks, address verification, credit history checks, and reference checks.

Companies verify an individual’s identity by checking government-issued documents such as Aadhaar Card, Passport, Voter ID, and Driver’s License to ensure the individual’s identity is genuine.

Companies verify educational qualifications by contacting educational institutions to confirm the authenticity of degrees, certificates, and other academic achievements listed by the candidate. This ensures that the candidate possesses the claimed educational background.

A criminal record check involves searching national and local databases to identify any criminal convictions, pending charges, or legal issues associated with the candidate. Companies often work with law enforcement agencies or third-party verification services to conduct these checks.

Companies verify a candidate’s address by checking utility bills, rental agreements, and conducting physical verification visits to the provided address. This ensures the candidate’s residential details are accurate.

If discrepancies are found, the employer reviews the findings and may discuss them with the candidate. Depending on the nature and severity of the discrepancies, the employer may decide to proceed with caution, provide an opportunity for clarification, or terminate the hiring process.

Yes, it is legal for companies to conduct background checks in India, provided they obtain the candidate’s consent and adhere to relevant data protection laws and regulations.

Background checks benefit employers by reducing the risk of hiring unqualified or fraudulent candidates, ensuring workplace safety, protecting company reputation, and complying with legal and regulatory requirements.

By Siddharth, ago
What is background check, meaning and definition

What is background check, meaning and definition?

‘Shortlisting suitable candidates out of the lot is a strenuous task. Some profiles fit best into the positions. While some appear promising, some seem suspicious. Jumping into a conclusion while choosing candidates on their face value is not a right approach as they might be misleading. A comprehensive background check of a candidate based on employment history, educational checks, and criminal records can keep your workplace safe.’

What is background check?

Background check is a process that companies conduct during the hiring process to authenticate the information provided by the candidate for right onboarding. Background verification involves multiple checks to validate past employment history, education records, employer details, identity checks, address checks, and much more. The background check usually starts as soon as the candidate clears all the rounds of the interview. 

Background check – The emerging hiring trend! 

Background check is one of the top hiring trends to stay relevant in the market and meet compliance and data security regulations. With the changing work environment and new data protection laws to prevent identity frauds, companies cannot afford even a minor discrepancy in the resume. One wrong candidate and your reputation earned over years go for a toss.

Top reasons to conduct employee background check

  • To Prevent Dual Employment/Employee Moonlighting: Employee moonlighting and the concerns around it i.e. data privacy, confidentiality breaches, productivity loss, etc. came to the fore especially after Covid-19 pandemic when employees started working from home, and a majority of them adopted a hybrid model later. Moonlighting cases put ethical obligations and commitment of employees under the scanner. It is becoming common to work parallelly with multiple companies, hide side gigs and facts when examined.

Shocking moonlighting instances have made companies to have strict background checks in place to track if their candidates are involved in multiple employments and assert a degree of control with revised policies.

  • To Reveal a Criminal Record: Imagine you get to know the criminal records of your employees after all the hiring process is done! Onboarding candidates with a dark criminal history behind them can pose a serious threat for your company. Moreover, you cannot risk your existing employees and work atmosphere for it. It will only compromise your workplace safety and brand equity.

AuthBridge’s industry’s largest negative and proprietary databases enables companies to conduct criminal record checks nationwide, across state, city, county, etc. to find out if there is any criminal history associated with the prospective hires.

  • To Identify Fake CVs & Degrees: The rat race to grab the best role is increasing among the candidates and so are the CV frauds. Fake references, false certifications, claims, degrees and misrepresentations about employment/education are some examples. For instance, a candidate who has done a one week certification from a premier institute might boast the same in the resume without mentioning the tenure. It will be misleading for a hiring leader whether it is a one week certification and a full-time one year programme. 

Hiring employees based on falsified information can create problems for the employer as they won’t be able to perform their duties or aren’t qualified to do so. Conducting background checks can help you gather the accurate information, spot CV frauds, and establish safety at the workplace.  

  • To Validate Employment History: Does the candidate actually have the work experience he/she claims to have? Sometimes to cover employment gaps, candidates misrepresent which years they have worked at previous organizations. It is very common to list more months to not showcase probationary fails or unemployed periods. Remember  – the more high-level position, the more extensive the background check process should be.
  • To Protect Against Reputational Risks: No company wants to be in the spotlight for a bad reputation. Loss of revenue, damage to brand value, and regulatory penalties are serious matters for any business. All these factors eventually lead to reputational risks. Everybody should work in tandem and take the right measures from the start to mitigate reputational risks. This usually starts when the best of talent is hired for both – crucial and regular business functions.
  • To Reduce Company’s Liability: Avoid unnecessary lawsuits and lower insurance costs by hiring people who get a green signal in background screening. The main reasons why organizations conduct background verification is to identify red flags in education, past employment, and criminal records of the applicants. A good hire can help you reap good profits in the future.

Candidate’s background check ensures that the applicant is suitable for hiring or not and based on that can make a final decision.

Top industries where background checks are mandatory

Due to increasing discrepancies in information in job applications, companies should run a background check on employees before onboarding them. The major employment sectors such as IT, healthcare, finance, automobile and others do mandatory background checks to filter out fraud applicants.

 

However, sectors like retail, restaurants and other organizations are less strict about background verification in India, mostly for entry-level positions. Irrespective of the sector, every company must have a strict background verification process in place of candidates to save time and money, avoid negligent hiring lawsuits, and detect criminal records.

How does background checks change from entry level hires to mid/senior level?

When going from entry level to senior level, the verification also goes beyond the regular background checks for in-depth investigation. From keeping tabs on social media activities to unfolding criminal records/affiliations, and much more, companies go an extra mile for leadership hiring and stay compliant to various global AML and other regulatory standards like FCPA, UK Bribery Act, Prevention of Money Laundering Act among others.

Further, it is not just seniors, but even juniors who worked under them are part of the background check interviews conducted before an individual is hired at senior level.

What is the process for background checks and how is it done?

Background check process involves various checks to validate education records, past employer details, identity checks, resume checks and address checks. At AuthBridge, we power your background verification process with real-time verification capabilities. Our AI-powered technology and proprietary database help you conduct thousands of verifications in minutes and ensure industry fastest turnaround time.

Our top USPs of background checks process

  • Proprietary databases
  • Domain expertise
  • Customisable and integrable
  • Fast and secure
  • Industry specific  

How much time does it take for background checks?

There is no specific turnaround time but mostly it can range from one week to one month to carry out the process. The process varies from one employer to another, and other factors such as how much information is available of the new hires. It might take a longer time if the employer is looking for more in depth information. 

With AuthBridge, identity checks and online criminal record checks can be performed in real-time or near-real time. Other checks like Police Verification and Education verification might take some time as there is a dependency on the Government and other agencies for information.

How AuthBridge helps you automate background checks?

‘Shortlisting suitable candidates out of the lot is a strenuous task. Some profiles fit best into the positions. While some appear promising, some seem suspicious. Jumping into a conclusion while choosing candidates on their face value is not a right approach as they might be misleading. A comprehensive background check of a candidate based on employment history, educational checks, and criminal records can keep your workplace safe.’

What is background check?

Background check is a process that companies conduct during the hiring process to authenticate the information provided by the candidate for right onboarding. Background verification involves multiple checks to validate past employment history, education records, employer details, identity checks, address checks, and much more. The background check usually starts as soon as the candidate clears all the rounds of the interview. 

Background check – The emerging hiring trend! 

Background check is one of the top hiring trends to stay relevant in the market and meet compliance and data security regulations. With the changing work environment and new data protection laws to prevent identity frauds, companies cannot afford even a minor discrepancy in the resume. One wrong candidate and your reputation earned over years go for a toss.

Top reasons to conduct employee background check

  • To Prevent Dual Employment/Employee Moonlighting: Employee moonlighting and the concerns around it i.e. data privacy, confidentiality breaches, productivity loss, etc. came to the fore especially after Covid-19 pandemic when employees started working from home, and a majority of them adopted a hybrid model later. Moonlighting cases put ethical obligations and commitment of employees under the scanner. It is becoming common to work parallelly with multiple companies, hide side gigs and facts when examined.

Shocking moonlighting instances have made companies to have strict background checks in place to track if their candidates are involved in multiple employments and assert a degree of control with revised policies.

  • To Reveal a Criminal Record: Imagine you get to know the criminal records of your employees after all the hiring process is done! Onboarding candidates with a dark criminal history behind them can pose a serious threat for your company. Moreover, you cannot risk your existing employees and work atmosphere for it. It will only compromise your workplace safety and brand equity.

AuthBridge’s industry’s largest negative and proprietary databases enables companies to conduct criminal record checks nationwide, across state, city, county, etc. to find out if there is any criminal history associated with the prospective hires.

  • To Identify Fake CVs & Degrees: The rat race to grab the best role is increasing among the candidates and so are the CV frauds. Fake references, false certifications, claims, degrees and misrepresentations about employment/education are some examples. For instance, a candidate who has done a one week certification from a premier institute might boast the same in the resume without mentioning the tenure. It will be misleading for a hiring leader whether it is a one week certification and a full-time one year programme. 

Hiring employees based on falsified information can create problems for the employer as they won’t be able to perform their duties or aren’t qualified to do so. Conducting background checks can help you gather the accurate information, spot CV frauds, and establish safety at the workplace.  

  • To Validate Employment History: Does the candidate actually have the work experience he/she claims to have? Sometimes to cover employment gaps, candidates misrepresent which years they have worked at previous organizations. It is very common to list more months to not showcase probationary fails or unemployed periods. Remember  – the more high-level position, the more extensive the background check process should be.
  • To Protect Against Reputational Risks: No company wants to be in the spotlight for a bad reputation. Loss of revenue, damage to brand value, and regulatory penalties are serious matters for any business. All these factors eventually lead to reputational risks. Everybody should work in tandem and take the right measures from the start to mitigate reputational risks. This usually starts when the best of talent is hired for both – crucial and regular business functions.
  • To Reduce Company’s Liability: Avoid unnecessary lawsuits and lower insurance costs by hiring people who get a green signal in background screening. The main reasons why organizations conduct background verification is to identify red flags in education, past employment, and criminal records of the applicants. A good hire can help you reap good profits in the future.

Candidate’s background check ensures that the applicant is suitable for hiring or not and based on that can make a final decision.

Top industries where background checks are mandatory

Due to increasing discrepancies in information in job applications, companies should run a background check on employees before onboarding them. The major employment sectors such as IT, healthcare, finance, automobile and others do mandatory background checks to filter out fraud applicants.

However, sectors like retail, restaurants and other organizations are less strict about background verification in India, mostly for entry-level positions. Irrespective of the sector, every company must have a strict background verification process in place of candidates to save time and money, avoid negligent hiring lawsuits, and detect criminal records.

How does background checks change from entry level hires to mid/senior level?

When going from entry level to senior level, the verification also goes beyond the regular background checks for in-depth investigation. From keeping tabs on social media activities to unfolding criminal records/affiliations, and much more, companies go an extra mile for leadership hiring and stay compliant to various global AML and other regulatory standards like FCPA, UK Bribery Act, Prevention of Money Laundering Act among others.

Further, it is not just seniors, but even juniors who worked under them are part of the background check interviews conducted before an individual is hired at senior level.

What is the process for background checks and how is it done?

Background check process involves various checks to validate education records, past employer details, identity checks, resume checks and address checks. At AuthBridge, we power your background verification process with real-time verification capabilities. Our AI-powered technology and proprietary database help you conduct thousands of verifications in minutes and ensure industry fastest turnaround time.

Our top USPs of background checks process

  • Proprietary databases
  • Domain expertise
  • Customisable and integrable
  • Fast and secure
  • Industry specific  

How much time does it take for background checks?

There is no specific turnaround time but mostly it can range from one week to one month to carry out the process. The process varies from one employer to another, and other factors such as how much information is available of the new hires. It might take a longer time if the employer is looking for more in depth information. 

With AuthBridge, identity checks and online criminal record checks can be performed in real-time or near-real time. Other checks like Police Verification and Education verification might take some time as there is a dependency on the Government and other agencies for information.

How AuthBridge helps you automate background checks?

Our AI-enabled solutions are focused on Employment, Education, Address, Criminal & Identity checks to verify and onboard employees instantly. With the help of iBRIDGE- our one-stop candidate onboarding, the entire hiring process can be automated (employee BGV, document collection, digital document signing & seamless onboarding). Below mentioned are some of the top benefits of iBRIDGE.

  • Tailor-made client-end processes to suit specific needs with quick TAT for fast decisions
  • Access to the largest corporate, legal, financial, negative public, and proprietary databases
  • One-click initiation of a new request/new candidate
  • Real-time visibility of the document/data collection process
  • Intuitive application with relevant document collection
  • Customizable alerts & notifications as per client request
  • Easily integrable with any HRMS/ATS via APIs

 

AuthBridge is India’s leading Background Verification (BGV) Company. Write to us at sales@authbridge.com or visit contact us page for more information.

By Siddharth, ago
KYC and Proof of Identity Navigating Compliance in India

KYC and Proof of Identity: Navigating Compliance in India

With digital transactions increasing in India, businesses must prioritize KYC compliance to verify their customer’s identities and prevent financial crime. One crucial aspect of KYC compliance is proof of identity (POI), which involves obtaining valid documents from customers to confirm their identity.

 

This article explains why POI is crucial for KYC compliance and provides insights into accepted POI documents, best practices for verifying POI, the impact of digital identity verification on KYC, and the future of POI in KYC.

Why Proof of Identity is Crucial for KYC

POI is a critical component of KYC compliance as it helps businesses to verify the identity of their customers and prevent financial crime. Financial institutions, in particular, are required to comply with KYC regulations to prevent money laundering and terrorist financing. The Reserve Bank of India (RBI) has issued guidelines on KYC that require banks to conduct customer identification procedures and obtain valid POI documents.

 

POI also plays an important role in preventing identity theft. Fraudsters make illegitimate use of stolen IDs and use them to open bank accounts, apply for credit cards, and conduct other financial transactions. By requiring POI, financial institutions can help prevent identity theft by ensuring that the person conducting the transaction is the legitimate owner of the identity they are using.

Types of Proof of Identity Documents Verification Accepted in KYC

In India, several documents are accepted as POI for KYC compliance. Businesses must verify the authenticity of these documents, which may include checking for security features unique to the document and conducting electronic verification services. Find the list of acceptable POI verification methods mentioned below:

 

Other documents that may be accepted as POI include:

  • Ration card
  • Senior citizen card
  • Disability ID card
  • Freedom fighter card
  • Kisan passbook
  • CGHS/ECHS card
  • Bank passbook with photograph

 

When accepting POI documents, financial institutions must be diligent in verifying their authenticity. This may include checking for watermarks, holograms, or other security features that are unique to the document. Electronic verification services must also be utilised to check the document’s validity and ensure that it has not been tampered with.

Best Practices for Verifying Proof of Identity in KYC

To ensure that POI documents are valid, businesses must follow best practices for verifying the identity of their customers. These practices include checking for security features such as holograms and watermarks, verifying the document’s expiration date, and conducting background checks to ensure that the customer is not on any watchlists or sanctions lists. Businesses may also use biometric authentication or facial recognition technology to verify the customer’s identity. Best practices for verifying POI include:

Checking the validity of the document

 

Check the document for signs of tampering or forgery, and ensure that it is not expired.

Verifying the identity of the customer

Compare the information on the document with other information provided by the customer, such as their name, address, and date of birth.

Conducting background checks

 

Conduct background checks on customers to ensure that they have no criminal history or ties to terrorism or other illicit activities.

Using electronic verification services

 

Use electronic verification services to verify the authenticity of the document and ensure that it has not been tampered with.

 

It’s important for financial institutions to have clear policies and procedures in place for verifying POI, and to provide regular training to staff to ensure that they understand these policies and procedures.

The Future of Proof of Identity in KYC

As technology continues to evolve, the future of POI in KYC is likely to see further advancements. Self-sovereign identity, which enables individuals to control their own digital identity, and decentralized identity, which allows individuals to prove their identity without relying on a centralized authority, are emerging trends in identity verification.

 

However, as new technologies and approaches to identity verification emerge, it is essential that businesses remain vigilant and continue to follow best practices for verifying POI. The need for businesses to know their customers and comply with KYC regulations is unlikely to diminish, and POI will continue to play a critical role in this process.

How does AuthBridge conduct POI checks?

AuthBridge’s verification and onboarding solutions build on cutting-edge technology i.e. liveness detection, facial recognition, OCR, etc. extract information from the ID documents, check for any tampering, and determine the authenticity of the identity document in real-time. This ensures that businesses are dealing with a real identity document and not a fake one. 

 

Here is how you can optimize your KYC process with AuthBridge:

Data extraction with OCR

AuthBridge OCR APIs help you reduce turnaround time by removing the hassles of manual data entry. Now you can just scan/upload your NID, license or other documents and fetch the details right into your system.

Realtime Database Checks

Verify the authenticity of the uploaded documents by checking the possibility of tampering with the help of our anti-tampering mechanism. Validate the information against our proprietary databases in real-time or opt for thorough offline verification.

Advanced Verification Methods

Leverage state-of-the-art liveness and face-match APIs to make your identity verification process fail-proof. Cross-validation of information against multiple sources with a match logic ensures the validity of the claim of the identity of the individual/entity.

 

Get AuthBridge’s robust verification and onboarding solutions to meet these technical objectives, while also being scalable and cost-effective. Not only will you meet your verification requirements but also offer a seamless onboarding experience.

 

Talk to our solution expert today to know more about it.

By Siddharth, ago
Simplified Due Diligence Benefits, Process, Examples

Simplified Due Diligence: Benefits, Process, Examples

The objective of due diligence is to gather all relevant information to make informed decisions that minimize risk and maximize returns. However, traditional due diligence can be a lengthy, costly, and complicated process. 

 

That’s where simplified due diligence comes into play. Simplified due diligence is a streamlined version of traditional due diligence that focuses on identifying the most significant risks and opportunities while minimizing the time and resources required. 

 

In this blog, we will explore simplified due diligence in detail, including its process, benefits, use case examples,  and how it differs from other due diligence approaches.

What is Simplified Due Diligence?

Simplified due diligence is a streamlined approach to conducting background checks on individuals and entities. It involves a basic level of investigation which focuses on collecting information from publicly available sources. Simplified due diligence does not involve in-depth investigations or extensive data analysis,  but relies on standard search tools and databases to gather information.

Benefits of Simplified Due Diligence

Simplified due diligence offers several benefits, including

 

  • Cost-effectiveness: Simplified due diligence is a more affordable option than other due diligence approaches. It requires fewer resources, and the process is usually completed within a shorter period.
  • Time-saving: As in-depth investigations and extensive data analysis are not involved,  the process becomes faster as compared to other approaches.
  • Simplicity: Simplified due diligence is a straightforward process that is easy to understand and implement. It does not involve complicated procedures or specialized tools.
  • Risk mitigation: Even though simplified due diligence is a basic approach, it still helps organizations to identify potential risks and avoid making costly mistakes.

 

How Does Simplified Due Diligence Differ from Other Due Diligence Approaches?

 

Simplified due diligence is different from other due diligence approaches in several ways. Here are some of the differences:

 

  • Scope: Simplified due diligence has a narrower scope than other due diligence approaches. It focuses on collecting information from publicly available sources, while other approaches may involve in-depth investigations and analysis.
  • Purpose: Simplified due diligence is primarily used for low-risk transactions, while other due diligence approaches are used for high-risk transactions.

 

Examples of Simplified Due Diligence

Simplified due diligence can be applied to various business scenarios. Here are some use-case examples of simplified due diligence:

 

Onboarding New Customers

Financial institutions may use simplified due diligence to onboard new customers for lower-risk products, such as basic savings accounts. This helps ensure compliance while reducing the cost and time associated with conducting more in-depth due diligence.

Vendor Due Diligence

Companies may use simplified due diligence to assess the risk associated with potential vendors. This could include verifying basic details such as business registration and reputation.

Business Partnership

Before entering into a business partnership, businesses need to evaluate the partner’s financial stability, reputation, and legal standing. Simplified due diligence can help them evaluate potential partners quickly and cost-effectively.

Compliance Audit

Businesses need to comply with various laws and regulations, including anti-money laundering (AML) and know-your-customer (KYC) regulations. Simplified due diligence can help them conduct compliance audits quickly and efficiently.

Employment Background Checks

Many employers conduct simplified due diligence as part of their employment background checks. This could include verifying a candidate’s employment history, educational qualifications, and criminal record.

Reconciling Supplier Invoices

Companies that have long-standing relationships with suppliers can use simplified due diligence to reconcile supplier invoices. By verifying basic information about the supplier, such as their name and address, companies can ensure that they are paying the right entity.

 


Get AuthBridge’s robust verification and onboarding solutions to meet these technical objectives, while also being scalable and cost-effective. Not only will you meet your verification requirements but also offer a simple, seamless onboarding experience.

 

<Talk to our solution expert today to know more about it>

By Siddharth, ago
What is Proof of Address (POA) and its relevance in KYC

What is Proof of Address (POA) and its relevance in KYC?

Proof of Address (POA) is a document that verifies a person’s residence address. It is an essential requirement in the Know Your Customer (KYC) process for banks, financial institutions, and other regulated entities in India. POA is critical in identifying and verifying customers’ identities and preventing fraudulent activities such as money laundering and terrorist financing.

India is home to over 1.3 billion people, making it the world’s second-most populous country. With such a large population, it becomes a challenge for banks and financial institutions to identify and verify their customers’ identities. Therefore, the Reserve Bank of India (RBI) has made it mandatory for banks and financial institutions to obtain POA from their customers before opening accounts or providing financial services.

This blog will give you a clear idea about the Proof of Address (PoA), its importance, documents accepted as Proof of Address, and its relevance in the KYC process.

Why is proof of address important? 

The relevance of POA in KYC cannot be overstated, as it helps banks and financial institutions in identifying and verifying their customers’ identities. By obtaining POA, banks and financial institutions can ensure that their customers are who they claim to be and that their addresses are genuine.

Moreover, POA is necessary for complying with the regulatory requirements set by the Reserve Bank of India (RBI). The RBI mandates that all banks and financial institutions must follow the KYC norms and maintain records of their customers’ identities and transactions. The KYC norms require banks and financial institutions to verify their customers’ identities and addresses to prevent fraudulent activities.

Apart from the regulatory requirements, POA is also essential for ensuring the accuracy of customer data. It helps banks and financial institutions to update their customer records and maintain accurate information. This, in turn, enables them to offer better services to their customers and enhance their overall experience.

Documents accepted as Proof of Address(PoA)

In India, POA can be established through various NIDs and supporting documents. All individuals should submit at least one acceptable proof of address document. These documents must be valid and up to date to be considered as proof of address. In addition, the address on the document should match the address provided by the customer. Every business has its own requirements/guidelines when it comes to PoA documentation checks, but the most common documents verification solutions are listed below:

For example, the utility bill must be issued in one’s name to match the government-issued identification. Also, the submitted document needs to have a date (usually, it’s three months) for validity reasons.

Problems Solved by POA in KYC Process

POA plays a crucial role in the KYC process as it helps businesses to establish the physical address of their customers. POA serves as evidence of the customer’s residence and helps businesses to verify their identity and assess their potential risks. POA is a mandatory requirement for the KYC process, and failure to comply with KYC norms can result in legal action, including fines and penalties.

  • Compliance: Compliance is a significant problem faced by businesses in the financial sector. Businesses are required to comply with various legal and regulatory requirements, including KYC norms. POA helps businesses to comply with KYC norms by verifying the address of their customers.
  • Risk Management: KYC helps businesses to assess the potential risks associated with their customers, including money laundering and terrorist financing. POA helps businesses to establish the physical address of their customers and assess the potential risks associated with them.
  • Fraud Prevention: Fraud prevention is a critical problem faced by businesses in the financial sector. POA helps businesses to prevent fraudulent activities by verifying the address of their customers. This helps to prevent identity theft, money laundering, and other fraudulent activities.

How does AuthBridge conduct POA checks?

AuthBridge’s AI-powered verification solution helps detect document tampering or any discrepancy to reduce fraud and makes address verification easy. Our digital address verification leverages the power of image recognition, GEO-tagging coordinates and liveness detection technologies to verify the identity and physical address of employees, customers, vendors and business partners and ensures seamless verification.

Some important features are listed below:

  • Detailed address capturing with GEO coordinates
  • Minimal paperwork and enhanced onboarding experience
  • Data security compliant and integrable with leading HRMS tools

Get AuthBridge’s robust verification and onboarding solutions to meet these technical objectives, while also being scalable and cost-effective. Not only will you meet your verification requirements but also offer a simple, seamless onboarding experience.

Talk to our solution expert today to know more about it. 

By Siddharth, ago
AuthBridge-footer-logo2

Stay Informed

Keep yourself updated with the latest innovations in BGV & Authentication Technology from India’s leading Background Verification Company

Sign up for our newsletter

Solutions

White-collar Verification
Blue-collar Verification
KYC Solutions
AML Solution
Digital Address Verification
Risk Management
Digital Underwriting
All Solutions →

Checks

Employment Verification
Education Verification
Address Verification
Aadhaar Card Verification
Pan Card Verification
Udyog Aadhaar Verification
GST Verification
View All Checks →

Products

iBRIDGE
OnboardX
TruthScreen
SignDrive
AuthLead
WorkAttest
Vault
CorpVeda
View All Products →

Resources

Blogs
Customer Stories
Whitepapers

View all Resources →

Company

About Us

Careers
Newsroom

Investor Relations

Help Center

For Clients
For Candidates
Youtube Facebook Linkedin
AuthBridge is the #1 Authentication Company. Copyright 2023 AuthBridge, All Rights Reserved.
Request A Demo
Youtube Facebook Linkedin

Hi! Let’s Schedule Your Call.

To begin, Tell us a bit about “yourself”

The most noteworthy aspects of our collaboration has been the ability to seamlessly onboard partners from all corners of India, for which our TAT has been reduced from multiple weeks to a few hours now.

- Mr. Satyasiva Sundar Ruutray
Vice President, F&A Commercial,
Greenlam

Thank You

We have sent your download in your email.

Case Study Download

Want to Verify More Tin Numbers?

Want to Verify More Pan Numbers?

Want to Verify More UAN Numbers?

Want to Verify More Pan Dob ?

Want to Verify More Aadhar Numbers?

Want to Check More Udyam Registration/Reference Numbers?

Want to Verify More GST Numbers?