Currently, KYC has become a very important Sabbath. Wherever you go, whether it is to open a bank account, to make an Aadhaar card, or to create an account in today’s new age wallet Paytm, KYC is required everywhere. So friends today, you will know from this article that KYC Kya Hai?
What is KYC?
So let us tell you what is KYC after all.
First of all, we should know who the KYC says. KYC stands for “know your customer”
The RBI implemented this KYC policy on the basis of Section 35A of Banking Regulation Act, 1949 and Rule 7 of Prevention of Money Laundering Rules, 2005, to prevent money laundering and to prevent banks from being misused. You can track your customer and monitor them according to their transaction and if they suspect any customer, then they can check it with their unique identity.
KYC is a type of identity card with which banks or other government organizations identify their customers. With the help of KYC, the bank easily gets the details of the identity of the customer, his address, bank transactions etc. done by him.
The bank maintains all these information. And keep updating them from time to time. So that they have the complete account of their customers, and with this help, the bank can easily catch any manipulation made by the customers.
You have to provide your current address and identity proof so that your KYC is updated.
So to update KYC, some rules have been made by the government according to which a person can give any document given below in identity proof.
Voter ID Card
Valid Job Card by NREGA
And for address proof, any one of them can give a wedge.
Voter ID Card
Bank account statement
Lpg gas bill
Landline telephone bill
Credit card bill
Periodic updation of KYC status
Banks have rules to update KYC according to risk management. Accordingly, the KYC of the high risk customer will be updated every 2 years and the KYC of the medium risk customer will be updated every 4 years and the KYC of the customer with flame risk will be updated every 10 years.
Important Elements of KYC Policy
KYC policy related to banks is the 6 key elements.
Customer Acceptance Policy,
Customer Identification Procedures,
Monitoring of Transactions, and
From the basis of risk management, the banks have then divided the customers into 3 risk categories based on their transactions, which will make it easier for the bank to track them. This risk category is given below
Low Risk Customer
Medium Risk Customer
High Risk Customer
That means those whose accounts lead to simple transactions such as the common man are placed in the category of low risk and the small business man is placed in the middle class and the politician and the big business man is in the high risk category.
At present, KYC has been linked to the Aadhaar card, ie your finger prints or the pupil of the Aadhaar card and any other details given by you. So, the benefit of linking with Aadhaar card is that now you do not need to provide a copy of your identity card or address proof and your photo copy to get KYC updated. Nor do you need to fill a form. All you have to do is match your finger prints in KYC machine with your Aadhaar number and your KYC update is done. So it is called e-KYC. But it cannot be done without KYC machine, so it is necessary to have KYC machine for e-KYC. Therefore, where this facility is available, you can get your kYC updated through e-KYC.
We hope that the above information will be helpful for you, even if you still have a query related to kYC, then you can write your questions in the comments.