The Securities and Exchange Board of India (SEBI) is an organisation by the Government of India that regulates the securities and commodity market of India. In the light of COVID-19, the SEBI issued a guideline in April 2020 clarifying the use of Aadhar in eSignature. This step by the SEBI was exercised to stabilise the declining economic condition of the country and encourage business and companies to continue their work. The impact of eSignature on business and market was so beneficial that people prefer to use eSignature, even making the process of registering more easier, provided scope to the business to run efficiently even in such a harsh condition in COVID-19.

SEBI Guidelines

SEBI issued guidelines to provide a safeguard against money laundering under the provisions of Prevention of Money-Laundering Act, 2002 and Prevention of Money-Laundering (Maintenance of Records) Rules, 2005. It recognised the use of eSignature under Section 5 of the Information Technology Act, 2000. The use of technology by the investors and manufacturers encouraged the use of e-Signature which promotes the KYC process. The KYC procedures were made simple by the SEBI to encourage the interference of technology in the field of business. KYC can now be filled online by attaching the scanned copy of the signature and photograph.

Why Aadhar e-Signature is used?

Aadhar e-Signature is preferred due to the reason that it is safe, convenient and reliable.

  • Easy to Use
  • Aadhaar eSignature is very easy and convenient to use. The user can easily complete the registration process online without moving outdoor. Since the use of Aadhaar card is a compulsory document in India, the use of Aadhaar eSignature is completely easy and comfortable for the user.

  • Data Protection
  • The data of the user is protected by the two-way authentication system. The data is stored safely in the cyberspace and can be accessed when needed. Even there is no chance of misplacing the data or wear and tear of the hardcopy document.

  • Operated Worldwide
  • The business can’t stop in any situation. The Aadhaar eSignature is the only convenient means of operating the business from all over the world without travelling throughout. The operation of the business becomes easy and the progress becomes fast when connected with other countries and its market.

  • Free from Risk
  • The risk of misplacing the data or losing the confidentiality of the data is quite less. Since the data is linked with Aadhaar and secured by both password and OTP verification system, the data is free from unknown interference without authority.

  • Easy Dispute Resolution
  • Every business or employee faces dispute in their day-to-day life. Since the signature is linked with Aadhaar number, the signature on the contract shows the consent of the user. If any dispute arises from the contract, the resolving of the dispute is considerably easier and quicker.

Procedure of Aadhaar e-Signature

Any Aadhaar holder can sign a document digitally with the help of e-Signature without the need of a cryptographic device or a physical digital signature or a wet signature.

In fact, by the help of the Open Application Program Interface (API), e-Sign can integrate certain delivery options.

The procedure for ensuring authenticate use of Aadhaar e-Signature services was directed by the Government of India as follows.

  • The customer has to link his Aadhar card to the bank account.
  • The biometric scanner captures the customer’s fingerprint and retinal image. Even in some places, the customer receives an OTP for authentication.
  • The information regarding the biometric value is verified with the stored data in the database for that particular Aadhaar number.
  • After verification, the customer can log in to the Unique Identification Authority of India (UIDAI) website by entering the Aadhaar number and OTP on the registered mobile number.
  • The customer can upload the scanned copy of the signature which they want to register.
  • After verification, the e-Signature linked with Aadhaar can be used legally.
How is it helpful during COVID-19?

The condition of a country improves when economic stability and employment remain stable or increase gradually. In fact, the business houses, companies and offices are expected to function regularly for better result. But in case of unpredictable situation, the work stops abruptly resulting in declination in economic growth.

In the case of COVID-19, everything happened all of a sudden without any prior notice. The employment, as well as the business, faced a huge loss. Many contracts failed due to the non-performance of services. The use of Aadhar eSignature become a blessing in such a condition where people are not allowed to move or work efficiently. The new system of work i.e work from home came into existence where the data and documents can be efficiently used and signed through Aadhaar eSignature. The easy, convenient and safe way of forming contracts was through signing document through Aadhar eSignature that can be registered easily through an online platform.


Since, the use of Aadhaar eSignature is easy, convenient and secure, there is no difficulty in using it. The country can easily progress with the use of Aadhar eSignature without waiting for reopening of the public transport after lockdown due to COVID-19 to travel anywhere for entering into any contract. The guidelines by the SEBI are beneficial for every business and should be encouraged.