All About Know Your Customer (KYC) – Documents needed for KYC

Know here all about KYC, What is e-KYC, What are documents needed for KYC. KYC full form is – Know Your Customer. Know Your Customer (KYC) Policy is an important stage which is developed for preventing identity theft, money laundering , fraud etc. The main aim behind Know your customer (KYC) policy is to enable banks or any institution to know or understand their customer better and to ensure that services of banks are not misused.

KYC verification of identity address
KYC

What is KYC / e-KYC – When KYC is needed ?

What is Know Your Customer (KYC)?

KYC is a regulatory and legal requirement and KYC policies are framed by respective banks incorporating the key elements following the Reserve Bank of India’s directive in 2004 such as Customer Acceptance Policy, Customer Identification Procedures, Monitoring of Transactions and Risk management

Process of KYC entails identifying the customer and verifying the identity with reliable and independent documents or information. Bank ask customer for relevant documents to identify and verify the identity of customer while opening any account or use of any bank service.

You will need KYC documents under following situations 

  • Any Financial institution will ask you for KYC documents for using their services.
  • Opening any type of Bank Account
  • For Credit Card Application
  • For Loan Application
  • For Availing Locker Facility
  • For investing in a mutual fund
  • Financial institutes may ask for a mandatory KYC process in other instances also etc.

What is e-KYC ?

  • e-KYC refers to electronic KYC.
  • e-KYC is possible only for those who have Aadhaar numbers.
  • While using e-KYC service, you have to authorise the Unique Identification Authority of India (UIDAI), by explicit consent, to release your identity/address through biometric authentication to the bank branches/business correspondent (BC).
  • UIDAI transfers your data comprising name, age, gender, and photograph of the individual, electronically to the bank/BC.
  • Information thus provided through e-KYC process is permitted to be treated as an ‘Officially Valid Document’ under PML Rules and is a valid process for KYC verification.
    What is e-KYC why Kyc is needed
    What is e-KYC

For KYC , Banks require the following information / documents :

  • Legal name and any other change in names used.
  • Correct permanent address

The individual will have to submit the Xerox copy for bank’s record and you need to provide original document for verification with copy.

Identity Proof(any one of the following)

  • Passport
  • PAN card
  • Voter’s Identity Card
  • Driving license
  • Identity card (subject to the bank’s satisfaction)

Address Proof(any one of the following)

  • Utility bill
  • Bank account statement received by mail / courier along with signature verification by the Banker or a cheque drawn on that account for a minimum amount as specified by the Bank, deposited into the account
  • Letter from employer (subject to satisfaction of the bank)

Documents Required For KYC

For Accounts of Companies/Partnership Firms/Trusts & Foundation, a different set of documentation and information is required.

You can check the list here – https://rbidocs.rbi.org.in/rdocs/content/pdfs/PMLAME170714_A.pdf

It is also required to periodically ipdate the KYC Information whenever asked by the Bank. In case of non cooperation by customer , Banks or any financial institute have right to close the account after issuing of due notice to customer explaining reason.

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