Simplifying Income Verification for Lenders

To disburse a loan, lenders must document borrower's income, employment, and credit history associated with them. The analysis of these documents before the disbursement of loan provides an assurance to the lender that the possibilities of a loan getting converted into a bad loan will narrow down.

Published on 25 OCTOBER 2021 | 4 mins read

The borrower's ability to repay is gauged by their income. The verification of income from a credible, watertight source is a major challenge. This is also the most critical step in the process of credit decisioning and a thorough verification of income ensures responsible lending and offsets any future risk of loan defaults.

It's fair to say that in today's competitive arena the lenders are solely focused on their core competencies of attracting borrowers and underwriting loans, the process of verifications is done quickly based on the documents shared by the applicant and time is a critical factor at play here, having an applicants income verified from reliable and secure sources within seconds of them submitting documents is quite a task!

A through income verification is required for the following type of big-ticket loans:

  • Home Loan
  • Auto Loan
  • Personal Loan
  • Business Loan
  • Agriculture Loan
  • Loan against property
  • Loan against Shares


In this blog we will focus on highlighting the importance of verifying the income of a salaried individual and share the most reliable and secure way to get income verification done instantly to enable faster disbursement by lenders.

Why do banks need an airtight income verification method?

In a recent report shared by CRISIL, Indian banks are facing a rise in bad loans to 8-9% of lending. One way to avoid bad loans is to have a air-tight document verification process

As mentioned earlier, the income of an individual reflects their repayment capacity. Banks receive documents like salary slips, bank account statements, spouse’s salary (for joint-loans), etc. to determine the repayment capacity of an individual. To reduce the risk of bad loans banks must focus on having a robust, secure and instant documents verification process. 

With the digital lending boom post pandemic it has become even more important to verify income related documents instantly through reliable sources for banks to stay ahead in the competitive curve and reduce the risk of loan defaults. 

How can banks integrate a risk-free alternative income verification process?

With digital loans in vogue, banks aim to make a real-time disbursement, complying with the AML and KYC checks can be quite a time consuming task. Income verification only based on the documents shared by the applicants can be prone to risk. 

Here are the best alternative ways of verifying income instantly by Karza Technologies with minimalistic inputs:

Employee Provident Fund Authentication

EPF authentication is used to authenticate the income of a borrower. Our solution helps banks extract Employees Passbook details (with an OTP consent), which includes a month-on-month contribution by each employer and the employee's demographic details. 

This ingenious API requires the consent and agreement of the borrower, which is authenticated through an OTP sent on the borrower's number registered with the EPFO. This OTP-based Passbook Retrieval system provides uninhibited access to the provident fund contribution and can be used for validation and authentication of the employment and income of the borrower.

Furthermore, we also enable banks to build user-specific critical information viz. List of Employers, Overall Work Experience, Estimated Earnings (month/annual/till date), Salary hikes, etc.

Ways to enrich existing borrower data using pre-filled inputs for advance income and employment verification

Karza Technologies advanced income and employment verification enables banks to further enrich their existing customer data and take informed credit decisions. 

Employment Verification Advanced [This solution does not shed any light on income, it highlights only the employment status]

This solution shares a comprehensive, far-reaching, extensive, and exhaustive lookup on an individual's employment. With just the employer's name and the employee's name, banks can verify whether the concerned individual is employed with the company or not. 

With this solution banks can: 

  • Leverage Karza services recursively to validate, authenticate, and confirm an individual's employment based on employee name and employer name.
  • Conduct email authentication and check and validate the domain name to boost the bank’s confidence in the profile
  • Intricately examine the employment history lock, stock, and barrel of the individual based on the filing of returns with the EPFO. 
  • Validate, authenticate, and confirm the individual's employment history based on employer name, employee name, and mobile number, considering whether the UAN number is linked to the mobile number or providing your UAN number directly.

This solution shares a conclusive summary and provides direction for better credit decisioning. 

Point to note: Most of the services except EPF Authentication require no customer intervention; hence the process is extremely smooth and streamlined to avoid any inconvenience caused to the customer.

Exclusive Form 16 Authentication

Form 16 is a certificate issued to the salaried class from their employers to acknowledge the deduction of TDS by the employer. It is considered an indispensable proof of income and salary.


Income verification is a fundamental and an essential step as it helps determine the creditworthiness, indebtedness, repayment capacity. In this digital lending era where the lending decisions need to be made instantly Karza Technologies solution powers bank’s' credit decisioning engine to verify incomes instantly, minimizing the onboarding friction for banks and enabling them to provide a seamless customer experience. 

For a quick demo of our Income Verification/ Employment Verification Advanced solution write to us at