What is the full form of kyc

KYC's full form is "Know Your Customer"), which relates to the identity process and involves verification of all customers and customers by banks, insurance companies

What is the full form of kyc
What is the full form of kyc

KYC's full form is "Know Your Customer"), which relates to the identity process and involves verification of all customers and customers by banks, insurance companies and other institutions before or during the transaction with your customers. (RBI) has made KYC mandatory for all banks, financial institutions and all other digital payment companies that carry out financial transactions. Let's take a closer look at KYC and the essential KYC documents.

 

Table of contents

1.Importance of KYC

2.Types of KYC

2.1.Aadhaar-based KYC

2.2.In Personal KYC

3.When is KYC Required

3.1.KYC For Banks

3.2.KYC For Investments/Life Insurance

4.Necessary KYC Documents

4.1.Proof of Identity

4.2.Proof of Residence

5.What is e-KYC?

6.How to do KYC in India?

6.1.How to do Aadhaar based KYC or Online KYC?

6.2.How to do KYC Offline?

7.eKYC vs. oKYC vs. CKYC

8.KYC - Requirements and Use Cases

9.In Conclusion

 

Importance of KYC

KYC is an essential step in preventing illegal financial activities, this process also prevents financial organizations from being used for money laundering activities without their knowledge, moreover, this process is also beneficial for companies that use or work with services such as investment in mutual funds, brokerage Shares etc. Thanks to KYC, banks and financial institutions can check the legal status of the company, the owners and their authorized signatories.

 

 

Types of KYC

 

Aadhaar-based KYC

This is a verification process that can be done online so it is simple and convenient. Customers must upload a scanned copy of their Aadhaar card for verification. This process is also known as eKYC.

 

In Personal KYC

Another option for KYC verification is face-to-face interaction, in which the customer must go to the nearest branch of the financial institution or the KYC kiosk and authenticate their identity. In certain circumstances, a KYC registration officer may also visit the customer for verification.

 

 

When is KYC Required

Once you understand the importance of KYC and its relevance, it is important to know when to need KYC. While KYC is legally binding, completing the KYC / eKYC process will also help customers gain access to the various premium products offered by Finance. Companies and also make transactions faster.

 

 

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KYC For Banks

The completion and updating of KYC varies regularly from account to account, depending on the risk perception of the bank. Hence, KYC becomes very necessary in conducting transactions such as opening bank accounts, investing in time deposits, recurring deposits, mutual fund accounts, and online investing. .

KYC becomes critical as it helps banks ensure that the request and all other details are from a legitimate customer. Securing the identity of a person; This way, banks can easily predict and prevent fraud.

 

 

 

KYC For Investments/Life Insurance

KYC information is necessary to ensure that investments / purchases in insurance policies are made by a real person while containing black money cases. Hence, the KYC process is something that all life insurance and mutual fund investors must adhere to through a KYC registration agency. (KRA) according to the guidelines of IRDAI (Insurance Development and Regulatory Authority of India) and SEBI (Securities and Exchange Board of India).

 

 

KYC is indispensable for people who want to open a demat and stock trading account, a bank account, a fixed deposit account, take out life insurance, operate mobile wallets for digital money transfers and register any other financial transaction with an agency. You cannot open or conduct financial transactions in India.

 

 

 

Necessary KYC Documents

A KYC document is a document from a person or company that can verify your identity and address. While the most requested documents are the Aadhaar card and PAN card, there are other documents that can be used for KYC verification at various financial institutions. these are

 

Proof of Identity

Some of the documents that can obey as proof of identity are :

1.Aadhaar Card

2.PAN Card

3.Valid Indian Passport

4.Valid Voter ID

5.Valid Driver's License

 

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Proof of Residence

Some of the documents that can be used as proof of residence

1.Aadhaar Card

2.Valid Indian Passport

3.Valid Voter ID

4.Valid Driver's License

5.Electricity Bills (Electricity, Water, Gas)

 

What is e-KYC?

Banks used to require customers to physically visit their branch and submit the necessary documents to complete their KYC process, but now customers can complete the process electronically and online. and paperless process.

 

 

How to do KYC in India?

 

How to do Aadhaar based KYC or Online KYC?

Create your account on the official website of the registered KYC registration agency and fill in your details like name, date of birth and address.Enter your Aadhaar card number and your registered mobile phone number and verify them with OTP.Upload a self-declared copy of eAadhaar after accepting the conditions of the declaration of consent to the eKYC

 

 

How to do KYC Offline?

You can download the KYC application form from your insurance company or bank and fill in your details. Sign the KYC form and send a physical copy to the relevant authorities. Attach certified photocopies of your proof of residence, your ID card and your passport photo to the KYC form

 

 

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eKYC vs. oKYC vs. CKYC

Previously, banks required customers to physically visit their branch and submit the required documents to complete their KYC process. However, customers can now complete the procedure electronically and online. , fast and paperless process.

 

Meet Your Customer Offline or oKYC is based on Aadhaar, and unlike eKYC, this procedure does not entry the UIDAI database directly. However, this does not apply to personal verification. or via QR code. This process is as fast as eKYC but offers more privacy. This procedure eliminates the need for a photocopy of aadhaar.

 

 

 

 

KYC - Requirements and Use Cases

The KYC process not only helps verify the identity and authenticity of the address, it also enables customers to process their transactions faster and access more products and services.

 

When using banking services and carrying out transactions, KYC becomes an essential step in ensuring security. Whether you are opening a bank account, opening and managing RD and FD, KYC is mandatory.

 

This is also the case with investments and insurance. There are a number of fraudulent practices that are committed with investments and insurance. KYC helps prevent all of this and ensures safe and ethical practices.

 

 

In Conclusion

KYC is an important process that ensures that all financial transactions and purchases are legitimate while helping to curb financial fraud, illicit money and money laundering. The process is extremely simple and quick and is required by law.