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KYC (Know Your Customer) Information For Customer Intending To Open Bank Accounts

The KYC procedure specifies certain commonly available documents as proof of personal identification and residential proof so as not to cause any kind of inconvenience to people who intend to open bank accounts. The Reserve Bank of India has instructed all the banks to follow KYC wherein certain personal information of the customer is obtained just to help the banks serve them better.KYC also makes reasonable efforts to identify the authenticity of the customers like the source of money, customer’s business and the real identity of the customers so as to avoid risks and minimize fraud. According to RBI, KYC guidelines, the customers are supposed to give their recent photograph, proof identity and address proof.

For the purpose of KYC, a customer is defined as a person who maintains a bank account or has a professional relationship with the bank, or any person connected with a financial transaction which can possess significant risks or reputation to the bank. It is a regulatory and legal requirement. The banks can from time to time ask for one’s name and address proof to keep updating the KYC documents. It is extremely important that the bank is updated about one’s communication details. KYC has two components- the identity and the address. KYC is also applicable to customers who maintain fix deposits in banks. KYC forms are available over the internet. There are a lot of details, one has to fill in and submit it.

KYC has become a mandatory procedure today and there is no escaping the paperwork while making financial investments, be it opening a bank account or a demat account or purchasing an insurance policy, filling up the KYC document is very important. The purpose of enforcing KYC in a rigid way is to prevent money laundering, terrorist financing, theft and other criminal acts. KYC is mandated by most regulatory authorities. Companies and distributors keep complaining that KYC requirements have burdened them with substantial administrative obligations.

However it is extremely important that KYC requirements are simplified, the authorities can opt for centralization of KFC norms but that will take quite some time now.

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