Mon. Dec 5th, 2022
All You Want to Know About KYC Documentation, Latest News Adda

The Reserve Bank of India has required all Indian financial institutions to verify the identity and address of all consumers doing financial transactions with them since 2004. As a result, the RBI established the KYC process as the sole verification method.

KYC stands for “know your customer,” and it is an effective way for an institution to confirm and thus verify a customer’s authenticity. Before investing in different products, the consumer must present necessary KYC documentation. The RBI requires all financial institutions to conduct a KYC process for all customers before allowing them to perform any financial transactions. This is a simple one-time process whether the customer uses online KYC or opts for offline KYC. For any loan from Bajaj Finserv, a KYC process is mandatory. To know more about the process, contact Bajaj Finserv customer care number.

The importance of KYC

KYC is a vital tool since it protects financial institutions and prevents unlawful activity. Many non-individual consumers use financial services such as trading and mutual fund investing. Banks may use KYC to verify an entity’s legal status, which includes cross-checking clients’ operational locations and confirming the names of its beneficial owners and authorized signatures.

Furthermore, the KYC procedure necessitates the customer’s job status and the kind of business they do, which is essential in determining an individual’s and/or company’s validity.

KYC is divided into many categories

KYC verification may be divided into two categories. Both are equally excellent and choosing one style over the other is just a question of personal preference. The following are the two:

KYC based on Aadhaar: This verification procedure is completed online, making it very easy for people who have access to the internet. A scanned copy of the customer’s genuine Aadhaar card must be uploaded here. If consumers want to invest in a mutual fund, they may only do so for a specific amount per year using Aadhar-based KYC.

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In-person KYC: If a consumer intends to invest more in mutual funds every year, they will be required to complete an offline in-person verification KYC. To do so, the consumer may go to a KYC kiosk and use Aadhaar biometrics to verify their identity. Alternatively, they can call the KYC registration agency and have an executive come to their house or workplace.

The importance of completing KYC 

KYC is necessary whenever a consumer wants to do any financial transaction. Following the verification procedure, the consumer provides information about their identity, address, and economic history to the financial institution that performed the test. This may help the bank determine if the money the client selected to invest was not intended for money laundering.

List of KYC documents

Depending on the KYC documentation, the needed papers must be supplied as hard or scanned copies. KYC requires two types of documents: evidence of identity and proof of address, which may overlap but typically differ. The following papers are required:

  • If you need to prove your identity, an Aadhaar card comes with a UID or unique identification number. Your voter ID, passport, or driver’s license may also be used.
  • Your picture on your PAN card is a critical document, including the applicant’s picture. The state or federal governments must issue this document.
  • A government-issued identification card by commercial banks, public sector corporations, or other public financial organizations.
  • Finally, identity cards are issued by your institution, if the college is linked with universities or any identification document issued by professional groups such as the ICWAI, ICAI, Bar Council, ICSI, and others.
  • Any credit or debit card that has an individual’s name and address and is issued by a bank.
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What is the procedure for completing KYC online?

The following are the steps to undertake to complete the KYC process:

  • To complete the KYC, go to the official website of any KRA or fund house.
  • Enter the information from your Aadhaar card.
  • Enter your OTP and hit the ‘Submit’ button.
  • UIDAI then verifies the information submitted. Following verification, the KRA authorizes the KYC procedure.
  • By visiting the KRA site and inputting your PAN number, you may check the progress of your KYC.

The benefits of KYC compliance

The main benefit of being KYC compliant is that you will never have to go through the KYC verification procedure again. It’s a one-time procedure, and before you can invest in mutual funds in India, you must have completed your KYC verification. After being KYC compliant, you may invest in any mutual fund plan with any fund company. Being KYC compliant allows you to begin investing in mutual funds in just a few seconds.

Conclusion

Only recently, when fraudulent transactions, fraud accounts, and money laundering became common, KYC documentation and the customer’s image were required. As a result, banks, other financial institutions, telecommunication providers, and other government authorities demand these papers to verify a person’s identification before continuing with any transaction. Income evidence is required to guarantee that the source of money is legitimate. Applying for a loan from Bajaj Finserv requires KYC documentation. For further queries, contact Bajaj Finserv customer care no. Using the branch finder, you may visit any of our locations. SMS the word ‘SOL’ to 9773633633.

Read Also: All You Need To Know About KYC And E-KYC Verification Online

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