5 ways to make your financial life easier

We have lived through times where tedious paperwork defines every single activity related to money and our financial life.

Not just that, access to your own information was a nightmare with several agencies holding various parts of it. Every single time, the responsibility is on you to get it all together and prove that the person in question is you. This dreaded process is also called KYC.

Over the years, the hassles have reduced but not been eliminated. We have greater access to online tools with some organisations promising us completely seamless and paperless experience. We have all had the experience in some measure, small or large.

But I was recently floored by my interaction and experience with the government departments. This includes the Income Tax Department and UIDAI (issuer of Aadhar).

I would like to share some of these super initiatives with you.

This post highlights 5 such initiatives that aim to bring a significant change in the way you will handle your financial life.

#1 Free credit report

A credit report is an aggregation of all your loans related data including personal loans, home loans and credit cards from various banks and financial institutions. This data is stored by an institution known as Credit Bureau. Put together, this loan data is your credit history.

The credit bureau also issues a score based on the credit history. It is one of the crucial parameters used to decide whether you will get that loan or not. In some cases, it also influences the rate of interest you pay on the loan. The better your credit history, the higher the score and hence, a likely lower interest rate.

Most people are borrowers but they have no clue as to how is the data reported to these credit bureaus such as CIBIL.

RBI through its recent notification has asked the credit bureaus to issue one report on request, once a calendar year without any cost or FREE.

The Free Credit Report and Score feature is live now (as of Feb 2017). Here’s how to access your FREE credit report and score from CIBIL.

This one was long pending. In countries such as US, UK, one free credit report every year is made available to everyone on request.

This is going to be hugely beneficial for you. There are times when your loan provider may report incorrect data to the bureau and this affects your credit history and the score. This further affects your chances of getting future loan.

You can use the free credit report to find out any incorrect data and take up for redressal. This ensures that you  live a clean credit life. Remember this, a good credit history has uses beyond a loan application.

Read more: Here’s how you can improve your credit score

#2 Central KYC

One of the most dreaded words that comes up during a purchase of a financial product is called KYC or Know your Customer.

A KYC typically requires a photograph, an address proof, an ID proof – all of this sometimes attested by a particular authority. In other cases, someone actually visits your location to confirm your address.

Even if you want to open a different account with the same bank where you have an existing account, it means going through the entire process and list of documents are required again. What the heck!

The pain doesn’t end there. Now if you had to make a change in your details, you have to submit it to every bank account, credit card, Mutual fund, insurance, PPF, etc. wherever you have an account.

That’s such a criminal waste of time, effort and resources.

So, the underlying problem is that the various companies and agencies don’t talk to each other. There is no central repository where they can access information.

This is now going to change. With the Central KYC, a new initiative, you will need to do KYC just once and all these agencies will access your data from this central repository. Even for updating your KYC records, you can submit your details to any one agency and it will be updated all across through the Central KYC.

Read: How I updated my Central KYC online in less than 10 minutes

#3 E-Docs / Digital Locker

The government has been pressing hard on its digital mission. As a result one of the key initiatives it has launched is the Digital Locker.

It is an online cloud storage place where you can store all your documents such as Driving License, PAN, Aadhar, Passport, your score sheets from various institutions, etc. Not just that, you can even gives access to various agencies through the digital locker.

You don’t need to carry documents anywhere. Just upload them here and it is enough. Imagine, the traffic police stops you and asks for your driving license. No worries. Just open your digital locker and show not just the license but also the vehicle registration certificate. Job done! 

It is easy to sign up and the upload process is seamless too. In fact, some documents can be directly called from the agency that provides. For example, you can call your Class X mark sheets just by inputting your enrolment number and year of exam.

Yes, it is free of cost too. I recently opened one. (Link to the DigiLock website)

#4 E-Sign or E-Hastakshar

Are you planning to get your lease and license agreement registered?

Do you want to apply for a PAN of your just-turned-major daughter, completely paperless, online?

Do you want to sign your IT return and submit it electronically?

Previously, you needed a digital signature certificate (DSC) along with a physical token that you had to insert into a computer and then sign the relevant documents. No more.

All of the above use cases are possible now in the most hassle free way you can imagine. This is courtesy the recently launched E-sign service.

If you hold a valid Aadhar, you can use E-sign to electronically sign any document online. Yes, no wet ink at all. Using Aadhar based KYC, the E-sign service authenticates you with an OTP on the registered mobile number or biometric data (registered with Aadhar) and then allows you to sign the document, online.

The best part is that the E-sign has full legal validity.

What do you have to do to E-Sign? You don’t have to do anything for it. The agencies which accept E-signs allow you to use the facility from their portal itself. You only need to have an Aadhar with a registered mobile number.

I recently applied for a PAN on the NSDL website using E-sign, completely online – no physical documents sent. It’s awesome.

#5 E-Insurance Account (eIA)

How many insurance policies does a person have on an average? It varies anywhere between 2 to 20 or more in some cases.

Now, when it comes to stocks, mutual funds, etc there is one central location to track all your accounts. For stocks it is your demat statement and for mutual funds, there is a consolidated statement that you can download.

So far, insurance had nothing like this. Now you can open an e-insurance account where your policy details can be stored in electronic format.

In one place, you can see all your policies, life, health, general, and their details. Any changes that you make to your policy details will be reflected in all in one shot. You can even appoint a care taker of your insurance policies.

You have to create an E-insurance account with one of the agencies such as NSDL, CDSL, CAMS and Karvy. This is a physical process. You then have to also send an application to each of your insurers as well to convert your existing policies and make the details available on the E-insurance account you have created.

The E-insurance account is worth the effort. With just a click of a button, you can access all your policy details.

In all, we are shaping up for a digital way of life. Many more forthcoming initiatives will take us into that direction.

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Between you and me: Have you used any of these? Do share you experience. Is there anything else you have come across that has simplified your financial life? Looking forward to read your comments.