Know Your Customer, often known as KYC, is a method that is required by law to be followed in order to determine and verify the identity of a customer who is requesting the services of a financial institution. It is up to the provider of the service to carry it out. Before you can take advantage of any of the services offered by the financial institution, including applying for a loan, depositing money, or moving funds from one account to another, you are required to go through the Know Your Customer (KYC) procedure first. A large number of financial institutions now provide consumers with the option of registering for their KYC requirements online, which simplifies the procedure and saves customers time.
Uploading the necessary documents to the online KYC registration page or portal is, therefore, all that is required of you; the remaining part of the process will be handled automatically.
The Significance of KYC
The Know Your Customer (KYC) process is an essential tool since it safeguards financial institutions and stops criminal actions. Customers who are not individual investors utilize financial services, including trading and investing in mutual funds, to a significant extent.
Banks get the right under KYC to confirm an institution’s legal standing, which also includes cross-checking customers’ functioning addresses as well as verifying the identities of one‘s controlling shareholders as well as authorized signatories. In addition, KYC gives banks the authority to refuse service to customers who fail to provide adequate identification.
In addition, the KYC procedure necessitates the type of the customer’s work in addition to the business that is handled by the customer, which would be helpful in determining the genuineness of an individual or corporation. You can click here to know more about this.
KYC Document List
During the Know Your Customer (KYC) procedure, the KYC documents that you are required to give can be divided into two categories: those that serve as proof of identity and those that serve as proof of address. You can speed up the process of getting your digitally authorized KYC by uploading the appropriate documents.
Identity proof
As evidence of one’s identification, one may present each of the six OVDs (Officially Valid Documents) that the Government of India has included on the list of KYC documents that are considered to be appropriate for use in the Know Your Customer process. These documents consist of the following:
- Passport
- A valid license
- Voter ID
- PAN Card
- Aadhaar Card
- NREGA Card is an acronym for the National Rural Employment Guarantee Act. It is important to take note that the previous name of NREGA has been replaced by MGNREGA(Mahatma Gandhi National Rural Employment Guarantee Act)
Address Verification
Your address verification is an essential step in the Know Your Customer process. If the address that is included in any of the KYC documents that you provided as proof of identity also comprises your current address, then that address alone is sufficient to serve as both your proof of address and proof of identity. If, on the other hand, the address provided is an outdated one, additional confirmation of the address will be required. Proof of address can be provided through any of the following documents, according to the standards set by the Government of India:
- Bill of the Telephone
- Gas Bill
- Telephone Charges
- Card for Rationing
- Bill for the Electricity
- Attestations
Conclusion
The Know Your Customer (KYC) registration process is a mandatory prerequisite for using the services of any banking institution that is licensed by the RBI. Before asking for a loan, whether it be for a car, a business, or anything else, you need to be sure that all of the necessary paperwork for your Know Your Customer check is ready.
