Know your customer

KYC

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What is KYC Full Form?

The full form of KYC is Know Your Customer.

KYC Full Form

KYC is a company method that verifies the identity of the customer and assesses the potential risks of a business relationship with criminal intent.

The name is also used to relate to the rules of banks and the anti-money laundering regulations governing such activities.

The Reserve Bank of India (RBI) adopted the KYC process to avoid financial frauds, such as identity theft, money laundering and illegal transactions.

Purpose of KYC

KYC guidelines help to prevent banks from using criminal networks knowingly or involuntarily for money laundering activities.

In addition, KYC helps banks to communicate with customers and financial transactions. This helps them handle their risks carefully.

Today KYC can be implemented not only by banks but also by various online companies.

RBI has recommended banks to implement KYC process during account opening. It protects customers from scammers who may commit fraudulent activity using their names, addresses and forged signs.

Therefore, customers of banks and other financial institutions must provide authentic information so that banks can identify and improve customer satisfaction.

Here is an essential document which is acting as identity proof and address proof

Passport

Voter ID Card

driving license

pan card

Aadhar card

If the document provided by you for identity proof does not contain the address details, you can send another legally valid document containing the address details like electricity bill, telephone bill, gas bill etc.

What is the importance of KYC?

KYC is necessary as it helps the banker to ensure that the request and other details are genuine. Cases of theft and embezzlement of deposits in accounts have been reported.

This will help prevent fraud while maintaining the identity of the individuals. Know the consumer approach has been in vogue for many years.

This is a must and must be followed by all individuals if they decide to open an account. It is not easy to open a bank account or mutual fund account without KYC compliance.

Who needs KYC?

KYC is a mandatory practice for financial institutions and other related businesses. Companies must comply with the rules or may face fines or penalties from the authorities.

Following are some examples of enterprises that need to involve KYC:

real estate business

Banks and their related subsidiaries

e-commerce

merchant of precious metals

insurance companies

Casino and Online Gaming

virtual currency business

India: The Reserve Bank of India introduced KYC guidelines for banks in 2002. [Source]

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What is KYC Full Form? Know Your Customer.