Know your customer (KYC) refers to the process of verifying and certifying the accuracy and authenticity of a prospective client’s details before granting access to services. The Know Your Customer (KYC) method has been widely used in the banking and finance industries and is quickly gaining popularity in the telecommunications, mobility, and e-commerce industries. Businesses and service providers in various industries have reduced fraud & cybercrime thanks to the institutionalization of knowing your customer (KYC) processes. However, doing things by hand usually requires a lot of time, money, and effort.
Now, with eKYC (also known as online KYC), it is possible and common to conduct the KYC process digitally. With the help of modern technology, the Know Your Customer (KYC) procedure has become more efficient, streamlined, and less expensive.
What’s the point of Know Your Customer?
The Know Your Customer (KYC) procedure is required for all monetary dealings. Details regarding your name, residence, and financial history will be required once the KYC verification process has been completed, as well as the financial institution conducting the test will request this information. This might reassure the bank that the money you decided to invest is not being used for anything nefarious.
The Know Your Customer (KYC) verification process often just takes a few minutes to an hour to complete after collecting the necessary KYC documents list.
Proof of Identity
A Know Your Customer (KYC) document is required to verify a person’s name, as well as a separate KYC document list, which is required to verify an individual’s address. One KYC document cannot be used to verify both a person’s identity and physical location.
- Official forms of identification (POI):
- Authorization to Drive
- Official Record of Birth
- A card proving citizenship in a member country
- Original notice letter/benefits booklet
- Documentation of national identity that includes a photograph of the applicant
- Including a photo of the person being verified is a standard requirement for this form of identification card.
Proof of address
In most cases, all that’s needed is a valid Aadhar card to prove your identity. If the applicant’s current and permanent address is not included on any of the acceptable forms of identification, they may submit an additional document list that does have that information.
- Telephone, electric, gas, and water bills that are no more than two months old at the time of submission.
- Provenance: bank manager-attested bank statement
- Lease Agreement with Notarized Witnesses
- An official residency verification letter from the employee’s current place of employment
- Municipal or property tax invoices, land title deeds, or other tax documents relating to the aforementioned property
It’s vital to remember that a KYC document can also be a spouse’s acceptable identification if it includes the couple’s shared address. There is a catch, though: the applicant’s spouse’s name needs to be on the primary identity documents also.
Sole proprietorship for businesses
A sole proprietorship is a business structure in which the owner, manager, and controller are all the same person.
The person and the companies are the same. As a result, a single installation needs to comply with a minimum number of rules. For a company bank account, you may use any of the following Know Your Customer (KYC) document lists.
- Certificate of GST Registration
- Document Proving Registration for Excise Taxes
- VAT registration certificate
- Formal Receipt for Sales Tax Purposes
- License to collect professional taxes
- Certificate of Commercial Tax Registration
- Whether it’s a Gumastha License granted under the Shops and Establishments Act or a municipal trade/tax bill, a certificate or license issued by the local government is required.
- Certificate of Registration for Small Enterprises/Memorandum for Potential Business Owners (Part II)
- Code Number Certificate for Import and Export
Businesses within the financial sector face an additional financial burden due to Know Your Customer laws. Governments and financial institutions are tightening up their Know Your Customer (KYC) protocols due to growing concerns over money laundering and terrorism financing.