Blogs: Do We Still Need Digital Signatures for Everything? Re-evaluating India’s authentication regime for corporate compliance in 2025

Why It’s Time for MCA to Offer Aadhaar OTP as an Alternative to DSCs

Overview

In the early 2000s, Digital Signature Certificates (DSCs) were a breakthrough. Introduced under the Information Technology Act, 2000, they brought legal validity to electronic records and signatures under Section 3, establishing trust in India’s emerging digital infrastructure. MCA made DSC mandatory for directors and professionals. DGFT, EPFO, GSTN, and other departments followed. In an ecosystem where digital filings were new and largely untrusted, this made sense. But it is 2025 now. Technology has changed. User behavior has changed. Trust in digital infrastructure has improved dramatically. The one thing that hasn’t changed? MCA’s over-dependence on DSCs.

Do We Still Need Digital Signatures for Everything? Re-evaluating India’s authentication regime for corporate compliance in 2025

What Aadhaar OTP Does in 10 Seconds, DSC Often Delays for Days.

Consider these basic MCA filings:
•
File DIR-3 KYC (One Page KYC Document)? DSC required
•
File INC-20A (Commencement of Business)? DSC required
•
Submit DIR-12 (resignation of director)? DSC required
Basic ROC e-forms—where no financial, legal, or third-party interest is involved—still demands a physical token and driver installation.
Meanwhile, Aadhaar-based OTP authentication is accepted across most critical services:

Use Case	Aadhaar OTP Accepted?
Income Tax Return Filing	✅ Yes
PAN & Passport Application	✅ Yes
GeM & Udyam Registrations	✅ Yes
e-Stamp & Agreement Execution	✅ Yes
e-KYC for Banks & Mutual Funds	✅ Yes
Startup India & e-Office systems	✅ Yes
MCA Filings	❌ No (DSC Mandatory)

Why This Matters

DSCs require:
• Buying a token
• Coordinating with a Certifying Authority
• Installing drivers
• Ensuring system compatibility
• Paying ₹1,500–₹4,000 per year
And even then, there’s no guarantee they’ll work when you need them—especially for professionals in remote locations or for senior citizens acting as directors in family-owned entities.
In contrast, Aadhaar OTP completes the job in 10 seconds.

The Added Burden: DSC Video Verification

DSC issuance and renewal now require video verification. In theory, it ensures accountability. But in practice, it adds friction:
• Failed verifications due to low bandwidth or camera issues
• Multiple rejections, unclear error messages
• Limited support from Certifying Authorities
• Compatibility issues with token drivers or system softwares
Even for a single-director OPC that files one form a year, this is mandatory.
As someone running a reg-tech firm, I see the real-world impact: Users aren’t resisting compliance—they're battling systems that feel unnecessarily hard.

Why Is MCA Still an Outlier?

The Aadhaar eSign framework, recognized under Section 3A of the IT Act, 2000, allows for secure, audit-trail-backed, OTP-based authentication that is:
• Legally valid (same legal weight as DSC under Indian law)
• Massively scalable (over 1.3 billion Aadhaar holders)
• Affordable (cost per authentication is negligible)
• Instant (no tokens, no drivers, no renewals)
It is already being used for:
• Filing ITR
• Signing agreements with stamp duty
• Accessing government subsidies
• Verifying banking and telecom accounts
So why not allow it for MCA filings, especially those that involve no monetary transactions or third-party dependencies?

This Isn’t About Removing DSCs

There are places where DSCs still make sense:
• High-value or high-risk transactions
• When full encryption or non-repudiation is essential
•
XBRL or auditor-attached documents
But insisting on DSCs for every single MCA interaction—no matter how routine—is inefficient, exclusionary, and misaligned with India’s broader digital transformation.
Let’s not remove DSCs—But let’s allow Aadhaar-based OTP authentication as an optional alternative for routine MCA filings.
Let users choose between DSC and Aadhaar, based on:
• Risk
• Volume
• Nature of the form
DSCs had their time. But continuing to enforce them for every single MCA form, even in 2025, feels like typing on a typewriter in the age of mobile signatures. Give users a choice. That’s what ease of doing business really looks like.

Conclusion

India’s reg-tech journey is about empowering users, not burdening them. Let’s not make digital compliance harder than it needs to be.
As someone building digital compliance tools every day, I see the difference friction makes. Users aren’t resisting regulation—they’re just overwhelmed by poor UX and outdated rules.
If we truly want to empower India’s 1.5 million+ active companies and 2.5 million DIN holders, we must focus on usability, accessibility, and choice.
We already have Aadhaar. We already have eSign. The infrastructure exists. What’s missing is policy will.
Ease of Doing Business isn’t just about big reforms. Sometimes, it’s about removing small roadblocks that make compliance feel harder than it needs to be.

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