What is KYC? : Full Form of KYC

 What is KYC?: Full Form of KYC

Introduction

Friends Today, if we want to open our account in bank, or create our ID in online payment app like google pay, phone pay, paytm, KYC has to be done everywhere. What is KYC, what is the full form of KYC, and what does it mean, and its benefits and why is it important? Like these questions arise in our mind. So today we will give you answers to those questions and are going to give complete information about it.

What is  KYC? and Its Full Form

The full form of KYC is "Know Your Customer". If to say it in simple language, then getting information about your customer. This is a type of form, by filling which the company and the bank keep complete information about their customers. Even when you buy a SIM card, the process by which your document verification is done, in a way, it is called SIM card KYC.

Why is KYC Necessary?

• To protect against illegal activities like money laundering, converting black money into white.
• For ease of doing work like loan, bank draft by banks and financial institutions to the planets.
• To get all the information of your customer (Address and Identity) so that he cannot cheat with the company and the bank.
• For the safety of customer's money. Because in many cases the speed of theft of money from the account by forgery and fraud has been observed.

Documents Required For KYC 

For this method you need two main documents in which first PAN card and second Addhar Card, Voter ID, Passport, Ration Card, Driving License any one of these documents is required.

 1. PAN card 

• It is very important to have a PAN card to get KYC done. Because in this we have a permanent account number, which we call PAN in short. With this our every account is linked. And if we also open more than one account, then the government does not have difficulty in knowing this. So that he can see our amount of transaction and can file income tax on us accordingly.

• Note – If in an emergency situation you want to get KYC done without PAN card. Then the bank gives you an option, by filling form 60, you can open your account. In which you can use any one document from the list given below. But after some time you will have to submit your PAN card number.

  2. You can use any one document from the list given below:

• Aadhar card
• Ration card
• Passport
• Voter ID
• Driving License

Out of these two documents, one document is taken to know your identity. Keep in mind that your name in this document is accurate and the second document is taken as address proof. Make sure that your address must be accurate in whatever document you are using for this method.

When is the KYC update to be done?

It basically depends on the transaction of the customers. Accordingly, the bank keeps the customer in the category of high risk, medium risk and low risk.

      1. Heavy Risk

• Under this, the customer has to get KYC updated in about 2 years.

      2. Moderate risk

• In the risk of this category, the customer has to get KYC updated in about 8 years.

      3. Low Risk

• Under this, the customer has to get KYC updated in about 10 years.

Types of KYC

      1. EKYC

• EKYC (Electronic Know Your Customer) means to get the information of your customer in electronical and digital form. Under which we have to give our information through online medium. With its use, you can open your account very easily by completing the process of e-kyc from home without going to the bank. In which the representative of the bank comes to your address and completes all the verification process and makes your work easy.

      2. CKYC

• CKYC (Central Know Your Customer) This is a central level KYC process. It was started according to the order of the Government of India, which was implemented in the whole country in 2016. Earlier, due to KYC only, different KYC had to be done in banks, mutual funds and different companies. But now due to being at the central level, all the information of the customer is available on the same server through CKYC. By getting CKYC done, you are given a KIN or CKYC number. This number is of 14 digit which shows your financial identity which can be checked everywhere.

Purpose of getting KYC done?

KYC was first introduced in our country in 2002 by RBI (Reserve bank of India) for banks. In 2004, this rule was ordered to be followed by the customers of all banks. And finally all the banks which did not bring KYC till 31 December 2005 were ordered to pass this rule. Its main purpose was to prevent the conspiracy to defraud banks by bringing KYC to India, wrongful funding of terrorist organizations, money laundering, illegal funding and creating duplicate accounts and knowing the complete identity of each of its customers.

Conclusion

Finally friends, we understand that it is our duty to get KYC done. And by getting it done, we can not save the banks and the government and ourselves from fraud. If any person further tries to do any wrong thing in our name, then that person should be caught.