What Is KYC? Full Form, Documents Required & Online Process

KYC is done through a video call, where people can easily do the KYC from any place instantly.

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2. In case the person has not updated the address in OVD: 

• Multiply the bill, like the water bill, electricity bill, piped gas bill, etc., which is not more than 2 months old.
• Property of municipal tax receipt. 
• Pension Payment Orders issued by the government if they contain the current address. 
• Letter of allotment of accommodation issued by the employer of the state government or the central government, etc. 

3. If you stay in a foreign land:  

For certain foreign nationals whose OVD does not contain address details, specified documents issued by the foreign government or foreign embassy/mission may be accepted as address proof

4. If your name has been changed: 

If your name has been changed, then the documents are also accepted, but you need to provide documents, like a marriage certificate issued by the State Government or a Gazette notification, indicating such a change of name. 

Hence, these are the required documents according to the RBI master direction – Know Your Customer. 

Bottom line: 

KYC is known as Know Your Customer. It is a verification process done in financial institutions to provide security against any illegal activities like money laundering, fraud, etc. It provides integrity and stability to the financial system. Several financial institutions have digitally advanced the KYC process, such as E-KYC, video KYC, and CKYC. One needs to provide the proper, acceptable, original, and valid documents to the financial institution to do the KYC process, maintaining the guidelines of the RBI. Many people are still unaware of KYC, its benefits, and its importance; that is why LoansJagat provides the proper channel for people to know about such content. Their blogs and articles are well-researched, expert-verified, and accurate to avoid a finance and banking knowledge gap. 

FAQs: 

What is KYC? 

KYC stands for Know Your Customer. It is a verification process done by financial institutions to prevent financial-related crimes and fraud. 

Is KYC mandatory for all within the financial ecosystem? 

KYC is mandatory where required under the regulations applicable to the relevant regulated entity and customer relationship.

What can one do if their original documents contain a different address for KYC? 

One can provide utility bills of the current address, not more than 2 months old, tax receipts, PPOs issued by the government, etc., to the financial institutions. 

What is a walk-in customer? 

'Walk-in customer' refers to people who do not have any account-based relationship with the reporting entity but perform transactions with the reporting entity. 

If one does not have original valid documents, can one still open a small account? 

Yes, a small account may be opened when an individual cannot provide the required OVDs, subject to the conditions and limits prescribed by the RBI.

Is it compulsory to provide the Aadhaar card number for KYC? 

No, it is not necessary to provide the Aadhaar card number for KYC, except for any benefits received from the government in the form of subsidies or benefits under a scheme. 

What are the examples of non-face-to-face KYC? 

Examples of non-face-to-face KYC include permitted e-KYC and video-based customer identification processes. Whereas, CKYC is a centralised KYC records system.

What 4 elements should a KYC policy include? 

KYC policy must include the 4 elements: customer acceptance policy, risk management, customer identification procedures, and monitoring of transactions. 

Does CKYC record the data in a centralised database? 

Yes, CKYC records people's data in the centralised database, which can be accessed by financial institutions with permits. 

Is KYC mandatory for mutual fund investments? 

Yes, KYC is mandatory for mutual fund investments to prevent fraudulent activities.