KYC stands for Know Your Customer, it is a unique process through which banks can keep information about the identity, financial details and personal address of every single customer.
It came into existence in 2002 for the first time, later on the Reserve Bank of India made it compulsory for all the banks in 2005. In some cases, customers are required to file KYC at the time of opening a bank account. Through this specific method the customers inform the bank about their financial history and this helps the bank to ensure that money invested by the customer is not for any sort of illegal activity.
Types of KYC
There are two types, one is Aadhaar based KYC, which allows a customer to perform KYC by providing Aadhaar details online. Here the customer can invest up to Rs 50,000 every financial year per fund and not more than that. If a customer wants to invest more then he or she should opt for In-Person Verification through Aadhaar Biometric Authentication process.
The documents you will need:
To perform KYC, a customer needs to submit some essential documents, they are
· Any proof of identity (Example: Voter ID /Aadhaar /passport etc.)
· Any document which can prove your address (Example: Voter ID, Ration Card, Telephone or Electricity bill, Passport etc.)
How to do KYC?
One can do it both online and offline by following some basic guidelines:
The online method –
There are two online methods available for it:
Aadhaar OTP (one time password)
To do your KYC online through Aadhaar OTP, one should follow the below instructions:
- Firstly, one needs to visit the KYC Registration Agency. (Some of them are – NDML.CAMS, KAVY, NSE)
- After that, provide the details of the Aadhaar card
- In the third step one needs to validate the OTP, which is the One Time Password sent to the registered mobile number
- Now, just submit the application and once it gets verified with UIDAI, the KYC Registration Agency approves your KYC
To do your KYC through Aadhaar based Biometric, one should look at the below instructions:
- Visit the portal of KYC Registration Agency or fund house
- Provide the Aadhaar card details and validate it
- In this process one needs to request for biometric authentication
- An executive from the fund house visits the mentioned address in the form, you need to show the original documents to him and provide the biometrics.
- After the necessary verifications the application will be submitted successfully and KYC will be done.
The offline method:
If any customer is not comfortable with the online mode of verification, then he or she can also opt for the offline method but one needs to remember that the offline process will take a lot of time compared to the online method.
To do KYC offline, one needs to follow some basic instructions –
- Firstly download the KYC form and fill it carefully
- Mention the details of Aadhaar / PAN ID
- One has to visit the KYC Registration Office to submit the application. Here the person needs to attach the identity proof and address proof along with the application
- After that an application number will be provided which can be used to check the status of the KYC.
Conclusion:
KYC is an important means of verifying the identity of a customer through a reliable source of documents and at present it is mandatory for every single customer to meet the minimum KYC requirements. Although there is a flexibility provided to those who are unable to provide the documents for genuine reasons at the time of account opening, however, banks have the right to discontinue an existing relationship or refuse to open an account of a customer.
