The Reserve Bank of India (RBI) made it mandatory for banks, financial institutions, and other organization to verify the identity and address of its customers who does financial transactions with them. so in case if you are not aware of KYC this article will help you to understand what is KYC, the Documents required for KYC? how you can do KYC, and other details.
KYC full form is Know Your Customer and Sometimes it is referred to Know Your Client. However both have the same meaning.
Its is a compulsory requirement which has to be followed by banks, financial institutions including Mutual funds, Insurance companies, stock brokers.
KYC verification allows customers to do any financial transactions like purchasing mutual funds, investing in the stock market, buying insurance, etc. with the respective companies.
Objectives of KYC
you must be thinking about why you need to do “Know your customer verification”?. what will happen after doing KYC? we have listed here the main objectives of KYC.
- KYC helps banks and other financial institutions to know their customer details and address hence avoiding any fraudulent activities.
- It helps banks to avoid money laundering, bribery, or corruption by knowing the details of their customers. the bank can keep track of certain accounts on which they suspect.
Why you need to do KYC?
There are various reason you should do your KYC. mentioned below are few of them.
- It gives you access to all the premium features of any financial App or its services. For Ex- you are using an app to add money to your wallet. if your KYC is not done you can add a limited amount of money.
- In case if you wish to invest in a Mutual fund, stock market, doing KYC is mandatory. without verifying yourself you can not open an account or can not do any transactions.
- Many Banks do KYC verification at the time of opening a new bank account with them.
Document Required for KYC
Now we know what is KYC? Let’s see the documents required for doing KYC verification. you can find the list of valid KYC documents below.
Proof of Identity
- PAN Card with photograph
- Aadhaar card, Voter ID, Passport, Driving license
- Identity card /document with applicant photo issued by Central/State Government and its departments.
- Identity card issued by College affiliated to universities, Professional Bodies such as ICAI, ICWAI, etc., Credit/Debit Card issued by banks
Proof of Address
- Passport, Voter ID, Ration Card, Rental agreement, Driving License, Insurance copy
- Utility bills like gas bill, electricity bill, landline bill –not more than 3 months old.
- Latest Bank Account Statement/Passbook.
- Self declaration by High Court or Supreme Court Judges.
- Proof if address issued by bank managers or Gazetted Officers.
- Identity Card or document with address issued by Central/State Government and its departments, College affiliated to universities, Professional Bodies such as ICAI, ICWAI, etc.
- The proof of address in the name of the spouse may be accepted.
Read Also How to Fill SBI KYC Form
Methods to do KYC
There are mainly three methods/ways by which you can do KYC.
- Online Method
- Aadhaar based Biometric KYC.
- Offline Method
How to do KYC Online
This online KYC is done through OTP. You will get an OTP to your registered mobile number. Follow the steps below in order to proceed with it.
- Visit any KRA (KYC Registration Agency) registered with the Securities and Exchange Board of India (SEBI) like CAMS, NDML, NSE, Karvy.
- Enter your details as per Aadhaar card.
- You will receive OTP to your registered mobile number.
- Enter the OTP and click on Submit.
- Once your Aadhaar details is verified , KRA approves your KYC.
- You can check status of your KYC through PAN card by visiting on KRS website .
How to do KYC through Aadhaar based Biometric?
Follow the procedure mentioned below in order to do online KYC through Aadhaar based biometric.
- Visit any website of KRA (KYC Registration Agency).
- Request the officials from fund house or an agency to visit your address in order to collect the details.
- A fund or an agency executive will verify your documents, scan your fingerprints, and map them with Aadhaar Database.
- Your KYC is done.
How to do KYC Offline?
One can do KYC offline as well. however it will take up to 7 working days to verify.Follow the process below.
- Download the KYC form from CDSL Ventures website and fill the details.
- Visit KRA office or submit the form to an agent.
- Do not forget to attach a copy of proof of identity and proof of address. Also, paste a photo of yours on the form.
- You will receive a receipt containing your application number which can be used to status of your application.
We have learned what is KYC? Documents required for KYC ? why we need to do KYC? All these questions has been answered in this article.
1: Is it possible to invest without doing KYC?
No, its not possible. you have to complete your KYC before any investment in the beginning.
2: I have done KYC while investing for the first time in a mutual fund. should I do KYC again for investing in the share market?
If you have already done KYC through SEBI approved institutions there is no need to do KYC again for investing in the share market.
3: How much time is required for KYC verification?
If you are doing it online, it will be done on the same day. However, in the case of offline, it might take up to 7 working days to verify.
4: Do I have to pay any fee for KYC verification?
No, KYC verification is completely free. you need not to pay any fee.
5: What is CYCK ID/Number?
CYCK is 14 digit number which is generated after verifying your KYC.it refers to central KYC.
6: How do I find my CYCK Number/KYC identification number?
- Visit the Karvy Website.
- Enter your PAN Number and Captcha.
- Click on Search Now Button.
- Your CYCK ID will be shown if your KYC is verified.
- CYCK number is also called KYC identification Number.