Know About KYC?
The Reserve Bank of India has made it mandatory for banks and financial institutions to verify the identity and address of all customers who conduct financial transactions with them. The KYC method is used to make transactions without much hassle. KYC (Know Your Customer) is a process through which a bank or institution verifies the identity and address of an individual. Now you can also do KYC with Aadhar card . Its process is explained below.
What is KYC?
KYC enables an institution to authenticate the identity and address of an investor. A customer has to submit his KYC before he starts investing in Mutual Funds, Fixed Deposits, Bank Accounts etc. However, one has to do this only once when he/she starts investing for the first time.
KYC is a method that ensures that banks are not used to carry out money laundering activities.
KYC came into existence in India and RBI in the year 2002 and in the year 2004 it was made mandatory for all banks to do KYC of customers by December 2005.
Why should you do KYC?
When you get your KYC done, you give information about your identity, address and financial history to the bank. This helps the banks to ensure that the money invested in it is not meant for money laundering/ illegal activities .
KYC is mandatory even for mutual fund investments. However, it is not necessary to do KYC every time before investing in different fund houses.
When is KYC required?
KYC is required before investing for the first time. Some banks also require customers to file KYC to open a bank account or invest in fixed deposits.
Types of KYC
There are two types of KYC:
- Aadhaar-Based KYC
- In-Person-Verification (IPV) KYC
Aadhaar- based KYC allows the customer to perform KYC by providing his Aadhaar details online. However, he only gets Rs 50,000 every financial year. allowed to invest in
If the subscriber wants to invest more in a specific fund every year, he/she needs to get the in-person verification done. The customer can visit the fund house office or KRA (KYC Registration Agency) kiosk for in-person verification.
Some mutual fund houses allow customers to get their IPV KYC done through video call, where they have to show their original identity and address proof. Once completed, the customer will be able to pay Rs.50,000/-.
How to do KYC?
KYC three different - different ways to be going to be a -
- Online
- Offline
- Aadhaar-Based Biometric Authentication
How to do KYC online?
There are two ways to do KYC online – Aadhaar OTP and Aadhaar based Biometric KYC. Aadhaar OTP allows a person to complete KYC easily within minutes whereas in Aadhaar-based Biometric KYC, one has to apply for KYC online and he/she visits the KRA home/office for biometric verification.
Your KYC line to the for below given the way the following to :
Step 1: Visit the website of any KRA (KYC registration agency) or a fund house
Step 2: Some of the KRAs are – NDML , CAMS , Karvy , CVL and NSE
Step 3: Enter your details as in your Aadhaar card the
Step 4: Make Verify using C to enter the OTP sent to the registered mobile number with the base
Step 5: Submit your application
Step 6: after Verified with UIDAI KRA gives nod your KYC
Step 7:You can check the status of your KYC application by visiting the KRA portal using your PAN
How to do online KYC with Aadhar card?
You can get your KYC approved through Aadhaar-based biometric authentication. If your KYC is done online then you will get Rs 50,000. Investment is allowed every year. However, if you get your KYC done through Aadhaar biometric authentication or offline, there is no maximum investment limit.
You based biometric authentication is used by online KYC is to down the the ways to follow to be :
- Visit the portal of any KRA or fund house
- Do Online KYC as mentioned in the above procedure
- Online Application for Biometric Authentication
- An executive of the fund house goes to the address mentioned in the form
- Show him your original documents and provide your biometrics
- Your application will be submitted and KYC will be done
How to do KYC Offline?
A customer can also do KYC offline. However, it may take up to 7 days for KYC to be approved by the KRA. To do KYC offline, you need to follow the steps given below:
- Download and fill KYC form
- Fill your Aadhar/PAN details
- Visit the KRA office and submit the application
- Submit the identity proof and address proof along with the application
- You may also be required to submit your biometrics in some cases
- You will get an application number which can be used to know the status of KYC
- Documents Required for KYC
- Certain documents have to be submitted to prove the identity and address of the customer/customer. The list of required documents is given below:
Identity Proof:
- Unique Identification Number (UID) (Aadhaar) / Passport / Voter ID / Driving License
- pan card with photo
- Identity card / document with photograph of the applicant, issued by any of the following: Central / State Government and its Department, Institution / Regulatory Authority
- Identity Cards issued by Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions
- Affiliated Colleges from Universities, Identity Cards issued from Professional Institutions like ICAI, ICWAI, ICSI, Bar Council etc. Credit Cards / Debit Cards issued by Banks
Address proof:
- Passport / Voter ID / Ration card / Registered lease or sale agreement of residence / Driving license / Flat maintenance bill / Insurance copy
- Utility bills like telephone bill (landline only), electricity bill or gas bill – not more than 3 months old
- Bank Account Statement / Passbook – Not more than 3 months old
- Self-declaration by Judges of High Court and Supreme Court, giving new address in respect of one's own account
- Proof of Address issued by any of the following: Bank Managers of Scheduled Commercial Banks / Scheduled Co-operative Banks / Multinational Foreign Banks / Gazetted Officers / Notary Publics / Elected Representatives of Legislative Assembly / Parliament / Documents issued by any Govt. or statutory authority
- Identity Card / Document with Address, issued by any of the following: Central / State Government and its Departments, Statutory / Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Universities and Business Institutions Such as ICAI, ICWAI, ICSI, Bar Council etc.
- FII/Sub Account, Power of Attorney/Sub Account given by the Custodian by FII (that is duly notary and/or apostle or consulate) which should carry the registered address
- Proof of address in the name of spouse can be accepted
I hope after read this Article every thing you know about KYC, Aadhaar KYC. We will help you become a better investor. Please Share this Post and Follow to our Google News and comment to give us more ideas on what we should include next Post ShareMarketDo Thank You.
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