New Delhi: DigiLocker is a big step towards paperless system. This government system is completely safe and free. With its help, documents, certificates can be easily shared and kept safe. Physical documents are not required. Presenting the Budget 2023, Finance Minister Nirmala Sitharaman announced that the scope of DigiLocker would be expanded. DigiLocker, a body for individuals, micro, small and medium enterprises, large businesses and charitable trusts, will be set up on this platform. Fintech services will benefit from this decision of the government. This will help reduce the cost of fintech firms and promote ease of doing business. The government is also going to simplify the KYC (Know Your Customer) process.
The Finance Minister said, “Fintech services in India are facilitated through our digital public infrastructure with Aadhaar, PM Jan Dhan Yojana, Video KYC, IndiaStack and UPI. The scope of documents available in DigiLocker will be expanded for more fintech innovative services.
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However, it is not yet clear how the government will allow fintechs to use DigiLocker. Experts estimate that an Application Programming Interface (API) will be prepared like Aadhaar and other things. With the help of API, interaction can also happen with other applications. In case of banking or fintech, API is important for KYC processes. For example, a fintech app can connect to the Aadhaar network and complete the KYC process by electronically verifying the authenticity of documents.
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An expert, who did not wish to be named, told Mint, “They will have to create an API that will allow fintechs to directly access documents stored in DigiLocker.” However, the expert also said that DigiLocker does not contain only the identity card, there are many documents and a framework has to be prepared for its security. His concern was about forgery. Although the government has said many times that DigiLocker is very secure.