What is KYC
Financial transactions might be complicated by illicit activities such as money laundering and fraud, KYC refers to the process of identifying and confirming documents relevant to a customer's identity and address before enabling them to use any services. When the KYC verification is finished, the Central KYC Records Registry generates a unique number or code known as the Know Your Customer/Client Identifier.
What is the Purpose of KYC in Banking?
KYC stands for document verification in the banking business to confirm a customer's identity. It attempts to eliminate scams and frauds such as financial fraud and money laundering by ensuring that transactions are genuine. all banks, financial institutions, and intermediaries must check clients' KYC information before providing them with services. In this regard, the KYC papers list, which develops a list of officially approved documents for KYC verification, plays a
Why is KYC Required?
The KYC procedure must be completed before engaging in any financial transaction, such as opening a savings bank account, taking use of the fixed deposit (FD) and third-party wallet capabilities, or commencing a mutual fund transaction.
What are the Benefits of KYC?
- Verifies the identity of the customer
- It is easy to understand the kind of financial operations in which the clients are participating.
- Examines consumer transactions to verify there is no risk of money laundering.
- KYC safeguards lending institutions against losses and scams resulting from illicit activities.
What are the Documents Required for KYC Verification?
- a passport, a voter identification card, a registered housing sale or leasing agreement, a ration card, a driver's licence, a copy of an insurance policy, or a flat maintenance bill (not more than three months old)
- Utility bills, such as landline phone bills, electric bills, or gas bills (not older than 3 months)
- Passbook or bank statement entries (not more than three months old)
- Self-declarations of Supreme Court and High Court justices, including their new addresses
- Proof of residence from any of the organisations listed above can provide
- passport, driver's licence, voter ID card, PAN card, or any other identity card or document containing your photo that is issued by a statutory or regulatory authority, the state or federal government, or its departments
- Identity cards issued by public financial institutions, public sector organisations, and scheduled commercial banks
Conclusion
KYC ensures that every transaction is processed after a comprehensive review of a customer's identification, which helps to avoid fraud, money laundering . Other regulatory authorities rapidly embraced the demand for KYC verification for all customers and consumers.