If you are startup or smaller business in today’s economy, the budget 2023 would have been a much-awaited event. There have been many positive announcements in the budget that will help upcoming businesses. Further to our article on the highlights of Budget 2023 and how it will affect startups, small and medium businesses, we will explain a bit more DigiLockers.

The two updates with regard to DigiLockers were as follows:

Fintech Services: Fintech services in India have been facilitated by our digital public infrastructure including Aadhaar, PM Jan Dhan Yojana, Video KYC, India Stack and UPI. To enable more Fintech innovative services, the scope of documents available in DigiLocker for individuals will be expanded.

Entity DigiLocker: An Entity DigiLocker will be set up for use by MSMEs, large business and charitable trusts. This will be towards storing and sharing documents online securely, whenever needed, with various authorities, regulators, banks and other business entities.

Now that we know what the update was, let’s take a closer look at how it will affect your business.

What is DigiLocker?

DigiLocker is an initiative by the government to enable paperless governance. The aim of the DigiLocker is to empower you digitally by providing access to a digital document wallet. The idea is to facilitate individuals and business entities to store, share, and verify documents and certificates. Like a physical locker that is used for safekeeping of valuables, a digital locker or DigiLocker will store important documents like digital versions of PAN card, AADHAR card, and so on.

How does the budget announcement change the use of DigiLocker?

The government has proposed that it will expand the scope of the digital document repository by making it a part of the public digital infrastructure (PDI). As a result, fintech companies will be able to cut costs and also increase the ease of doing business by making the KYC (know your customer) process simpler and faster.

There is still a lack of clarity on the way forward about the functioning of the DigiLockers. As per the experts, they expect APIs (application programming interfaces) to be built on the lines of Aadhar. Since APIs allow the interaction between different applications, it can be a way to quickly verify the  validity of the documents. However, further work has to be done to ensure the security of these documents, restricting unauthorized access, and ways to ensure that no misuse of these documents occur.

With this change, there is expected to be quicker access to finance as the KYC process will become simpler. There is also the possibility of reduction in cost of KYC resulting in improved efficiency and increased level of services to the underserved parts of the economy.

Now that we have an idea of how this update will affect fintechs and the way they approach KYC norms, let’s take a quick look at accessing DigiLocker.

Do you know how to register and activate a digilocker account?

1. Go to  https://digilocker.gov.in/ official website and click on the signup button
2. You need to sign with a valid mobile number to activate the DigiLocker
3. Follow the instructions to complete the registration process

How to upload documents on DigiLocker?

• Sign in to the site with your credentials
• Go to uploaded documents to upload. You have the option to upload more than one document at the same time
• Select the files and click on open
• Once the documents are uploaded, you have the option to set the type of document

Keep watching this space for more insightful information on Budget 2023.