The abbreviation KYC stands for” Know Your Customer,” which has become the basis for all customer interactions. The Reserve of India has mandated the KYC process for all financial institutions to verify the authenticity of applicants for financial services.
It has been ruled that before acquiring new customers, Banks, Insurance and Asset management companies must comply with the KYC guidelines,as the financial sector is prone to crimes like money laundering, identity theft, and terrorism funding.
When applying for a loan or any other credit form, applicants must submit the following KYC documents and Address proof.
Proof of Identity: A proof of identity must reflect the following
The documents officially valid as proof of identity and address include the following
Proof of Address: A valid address proof should provide the following information:
The current address proof can be rented, self-owned, or a family home.
Permanent address proof is not required if the applicant resides in a self-owned or family-owned house.Verification will be conducted at the given address to confirm the authenticity of the residence.
Process for completing KYC compliance.
For financial services,whether opening a new Bank account or acquiring credit, KYC compliance is to be completed as per the guidelines of the Reserve Bank of India. To ensure that the customer is not involved in fraudulent activities.
After submission, a thorough investigation of all the documents must be completed to ensure that the papers submitted and applicant details are authentic.
The required process for verification of KYC document scan be done conventionally. Considering the changing times, the digital processing of KYC has also been declared officially valid by the Reserve Bank of India.
KYC Verifications officially valid include:
• Any mismatch in the name spelling between the income and KYC documents is not permitted.
• The Documents submitted for KYC proof should be clear and legible.
• Details of documents submitted as Identity and address proof should be similar.
• The process for the financial request is halted unless the KYC is verified.
• Banks require updating KYC documents annually, or the services can be withheld.
The significance of KYC should not be underestimated. Only after the KYC has been checked is the Bank or financial institution authorized to complete the financial transaction, be it opening a savings account or acquiring further credit.
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