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What is Digital Signature and How does it work?

Sahil Mathur

UIDAI’s decision to charge for eKYC transactions, had considerable effect on financial institutes including banks and NBFC’s that were dependant on eKYC to fulfil their KYC obligations, though what most ignored was its effect on eSign, an online electronic signature service that can facilitate an Aadhaar holder to digitally sign a document.

The decision made eSign expensive for several service providers who relied on eSign to automate their customer onboarding and processing flows.

There is a lot to talk about the after-effects of the change in eKYC pricing but that is for another time. In this article, we try to cover what Digital/electronic signature is?

Another thing to consider is the Digital Signature and electronic signature or eSign are used interchangeably. Here we are talking about the electronic signature that is used to show the intent of a signatory w.r.t to a documented agreement. eSign, in this case, is used as an alternative to wet signature.

If you are curious about how Digital signature is different from eSign. Check out our article here.

What is Digital Signature/Electronic Signature ?


A digital signature is a mathematical technique or scheme that is attached to an electronic document to verify the authenticity of the document and the one who signs it.

A digital form of the wet signature (pen and paper signature) , digital signature or electronic signature are more secure and are faster to process and deliver. Especially incase of Aadhaar based eSign, every signature is authenticated using Aadhaar making it far superior than traditional wet signatures.

Aadhaar based eSign is fairly a new addition to electronic signature landscape, companies like Adobe have been providing eSigns for more than a decade before Aadhaar eSign. Traditionally though, electronic signature or digital signature was as simple as a scanned image or photo of your signature on a paper, which was digitally pasted on to a document. In some cases a digital pen was used to directly sign a document online.

A little more advanced form included a digital certificate to create an electronic signature which then can be used to sign the document with.

Aadhaar eSign or eSign in general allows an Aadhaar card holder to digitally sign a document instantly using their aadhaar number or biometric to verify the signee which then is combined with a digital certificate from a signing authority to create a signature.

How does Aadhaar esign or digital signature work?

Electronic signature is essentially an alternative for wet signatures, for a document to be esigned we need to have

  • A digital certificate usually issued by central certification authorities of the country
  • A verified signature of the person signing the document

eSign takes care of this using Aadhaar eKYC to verify the users identity and a certification authority like CCNA to assign digital certificates based on this verification. Both of which are embedded in the document to authenticate its legitimacy.

How to esign?

  1. To start esigning documents you would need the following,
    A license from a certification authority to receive digital certificates
  2. A way to authenticate users in India it’s done using eKYC , this requires a AUA/KUA license from UIDAI or you can take eSign services from government companies like NSDL.
    Read more about Aadhaar eKYC situation here.
  3. A system that can hash the document, create a signature using the certificate and Aadhaar eKYC data and is able to embed the signature into the document

Or you can just use a service like Veri5eSign to sign your document.

Ultimately it is upto you as an organisation or service provider to choose between wet signature or digital signature though we do need to consider that digital signature or eSign is authenticated , easy to verify and more secure than a wet signed document and it is legally binding.

Until next time.

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