The full form of KYC is Know Your Client or Know Your Customer. KYC is an identity and address verification process mandated by RBI. All financial institutions, like banks, insurance companies, wealth management companies, etc., must complete the KYC before accepting new customers.
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Know the Process of KYC in Detail
Let us not only know the full form of KYC in banking but also understand how it works. The KYC process is quite simple. All you have to do is show your identity card and address document. You can complete the process online or offline. For example, when opening a savings account, the bank authenticates your identity document and proof of address via KYC. Financial institutions follow the KYC process described below.
Submit KYC Documents
The financial institution asks you to present one of the following official documents (OVD).
- Proof of Identity: PAN/Aadhaar/Passport/Driver’s License/Voter ID/Employee ID with photo, etc.
- Proof of Address: Aadhaar/Passport/Voter ID/Latest Utility Bills/Lease Agreements/Bank Statements, etc.
Complete KYC Compliance
The RBI penalized financial institutions for failing to comply with anti-money laundering (AML) and KYC procedures. Therefore, they must carry out a thorough document review process. It includes biometric customer verification, Aadhaar-based authentication, e-KYC, video-based KYC, etc. Financial companies may refuse to offer their services if they find discrepancies in your KYC documents. KYC full form in banking is Know Your Customer.
Avail Financial Services
You can only avail yourself of the service if the financial institution has completed the KYC compliance process. Financial institutions may insist on regular KYC as part of their ongoing due diligence.
Types of KYC
After explaining what KYC is in banking, let’s understand the common types of KYC. To meet the changing times, RBI has approved various KYC processes in addition to conventional offline KYC processes. It includes the following:
You must visit a KYC branch or kiosk and submit a copy of your KYC documents. Representatives from financial institutions will authenticate your information using biometric data. Sometimes, financial institutions send employees to your home to carry out the KYC biometric verification process.
Aadhaar OTP-based KYC
It is an online process where a financial institution sends you a link. To complete the KYC process, you need to click on the link and enter your Aadhaar number and the OTP you received on the mobile number linked to Aadhaar.
A representative from the financial institution will contact you via video call to verify your KYC documents.
What is the Full Form of KYC?
The full form of KYC in a bank is Know Your Customer. It is a process to verify the address and identity of customers who will carry out transactions such as opening bank accounts, mutual fund investments, deposits, etc. KYC verifies a document known as a Proof of address, and the customer’s identity is acceptable. For example, Aadhar Card, Voter ID, Passport, Driver’s License, etc., are both proofs of address and proof of identity. After the KYC process is complete, the central registry of KYC records assigns a unique identification number known as the Know Your Customer Identifier.
What is the Importance of KYC?
KYC is essential because it helps bankers to ensure that requests and other details are genuine. There have been cases of theft and confiscation of funds from accounts. It helps prevent fraud by safeguarding the identity of the individual. The know-the-consumer approach has been trending for several years. It is mandatory, and all individuals must comply if they wish to open an account. It isn’t easy to open a bank or mutual fund account without KYC compliance. E KYC full form is Know Your Customer.
Who Needs KYC?
KYC is a mandatory practice for financial institutions and other related businesses. Companies must comply with regulations or face fines or penalties from the authorities. Below are some examples of companies that need to enter KYC:
- Dealers of precious metals
- Insurance companies
- Casinos and online gaming
- Real estate business
- Banks and their respective subsidiaries
- Virtual currency businesses
Objective of KYC
KYC policies help prevent banks from intentionally or unintentionally using criminal networks for money laundering. In addition, KYC helps banks communicate with customers and conduct financial transactions. It helps them to manage their risk carefully. Nowadays, KYC can be applied not only by banks but also by various online businesses.
RBI has recommended banks implement a KYC process during account opening. It protects customers from scammers who can carry out fraudulent activities using their fake names, addresses, and characters. Therefore, customers of banks and other financial institutions must provide authentic information so that banks can recognize and improve customer satisfaction. Here is a required document serving as identification evidence and address proof:
- Voter ID card
- Driving Licence
- PAN card
- Aadhaar Card
Suppose the proof of identity that you provide does not contain address details. In that case, you can provide other official documents with address details such as electricity bills, telephone bills, gas bills, etc.
KYC Full Form in Marathi
Well, KYC full form in Marathi आपण वर जाणून घेतले कि KYC काय आहे? आता आपण जाणून घेऊया KYC फुल फॉर्म मराठीमध्ये . आपण आताच वर जाणून घेतले कि आपली खरी ओळख आणि आपल्या बद्दल प्रस्तुत केलेली माहिती हि खरी आहे का नाही हे ओळखण्यासाठी KYC प्रक्रिया केली जाते.
मग आता त्याच प्रमाणे KYC चा अर्थ होतो.
इंग्लिश मध्ये KYC चा फुल फॉर्म हा “Know Your Customer” असा होतो. मराठीमध्ये याचाच अर्थ “आपल्या ग्राहकास जाणून घ्या” असा होतो.
eKYC Full Form in Hindi
Well, eKYC full form in Hindi is इलेक्ट्रॉनिक-नो योर कस्टमर (e-KYC या eKYC) एक पेपरलेस नो योर कस्टमर (KYC) प्रमाणीकरण प्रक्रिया है, जिसमें आधार प्रमाणीकरण के माध्यम से ग्राहक की पहचान और पते को इलेक्ट्रॉनिक रूप से सत्यापित किया जाता है। संक्षेप में eKYC KYC प्रक्रिया का एक इलेक्ट्रॉनिक संस्करण है जिसे भारतीय विशिष्ट पहचान प्राधिकरण (UIDAI) द्वारा प्रशासित किया जाता है। eKYC पहचान विधि का उपयोग बैंक, म्यूचुअल फंड, मोबाइल कनेक्शन और ऐसी ही सेवाओं के लिए खाता खोलने के लिए किया जा सकता है, जिन्हें KYC प्रक्रिया की आवश्यकता होती है।
What are KYC Full Form and its implications?
The full form of KYC is Know Your Customer. KYC tests are to establish the location and identity of the customer before the service you get. An electronic KYC process is in place to check for fraud and money laundering. KYC is mandatory for investments such as mutual funds, deposits, etc., and opening an account at a bank/financial institution. KYC full form SBI is Know Your Customer.
FAQs of Full Form of KYC
What is eKYC?
KYC verification done digitally online is eKYC.
Is investment above Rs. 50000 permitted without In-Person Verification?
IPV is a must for investments above Rs. 50000/-
What are the charges for KYC Verification?
KYC verification is done free of cost.