Know Your Customer, KYC meaning, is a type of customer verification process initiated by the Reserve Bank of India back in 2002.
It helps in the identification of individuals through a scrutiny of their official documents.
The list of Officially Valid Documents (OVDs) for KYC is as follows:
1# Identity Verification
For identity verification, the required KYC documents are Aadhaar card, passport, PAN details, voter ID, driver license, NREGA job card.
2# Address Verification
For address verification, the accepted KYC documents are ration card, property or municipal tax receipt, utility bill (telephone, electricity, piped gas, post-paid mobile, and water) that is not more than 2 months old, pension or family Pension Payment Orders (PPOs), bank account or post office savings account statement, etc.
3# Other Documents Issued By State Departments
In addition to the above, documents issued by state or central government departments and bodies (such as foreign embassies), public sector undertakings (PSUs), and scheduled commercial financial institutions can also be used during KYC verification as per the RBI.
The Reserve Bank of India has made it a mandatory requirement for all financial institutions to verify the KYC documents of every customer. The several elements incorporated in the KYC regime are:-
- Identification of customers before approving their loan, credit card, debit card, savings account, etc. applications
- Proper guidelines regarding the acceptance of customers based on the legitimacy of their documents showcasing proof of identity and address
- Risk management
- Transaction monitoring
Such type of an identity verification process helps every loan and credit card-issuing company to have a better understanding of their customer. Moreover, in several cases, this helps financial institutions substantially in monitoring suspicious behavior of their customers from initial stages.
One of the reasons why a credit card application can be rejected is not providing all the necessary KYC documents.
How to complete your KYC registration?
Most financial institutions offer the facility of completing your KYC registration through their official website. Candidates can also undergo KYC registration by visiting the nearest branch of their financial institution.
This is a mandatory step before applying any terms of credit; another reason for completion of your KYC meaning is that you will now able to meet the demands of the eligibility criteria of your desired form of credit.
Additionally, not being able to provide the relevant KYC documents are among the several reasons why you may have been declined a credit card.
There are various ways by which you can update your KYC details with your card issuer. Credit card users are required to update their KYC documents to their current accounts in order to ensure that the financial institution possesses accurate information regarding their identity.
Financial institutions, especially NBFCs, only require credit applicants to submit their KYC documents and a few other documents.
Individuals can apply for premium credit cards such as the Bajaj Finserv RBL Bank SuperCard by submitting the same. This card offers the benefits of 4 credit cards in one.
As a welcome bonus, customers can earn up to 20,000 reward points, which can be redeemed later into cashback offers, discounts, etc.
The NBFC also brings forth pre-approved offers to customers, which make availing credits quick by making the application process simple.
Such offers are also available with numerous other financial products such as personal loans, business loans, etc. Check your pre-approved loan offers by providing your name and phone number.
What are the different methods of eKYC?
The different ways you can electronically update your KYC, also referred to as completing your eKYC online, are –
- Aadhar based eKYC
- PAN based eKYC
Hence, if you are looking forward to apply for a credit card online, it is advised to provide all the above-mentioned KYC documents.
Know Your Customer, KYC meaning, is necessary to be updated with your financial institution every few years to continue using their services.
What do you understand by the meaning of KYC?
KYC meaning is Know Your Customer, which is a government-initiated verification strategy implemented by the Reserve Bank of India in 2002.
It involves scrutinizing documents of the identity and address proof of every individual.
What are the documents required for KYC verification?
The accepted documents which you require for KYC registration are –
- Aadhaar card, passport, PAN details, voter ID, driver license, NREGA job card for the verification of identity
- Ration card, utility bill (telephone, electricity, piped gas, post-paid mobile, and water), bank account or post office savings account statement, etc. for verification of address
In addition to the above, documents issued by public sector undertakings (PSUs), sate or central government departments and bodies (such as foreign embassies), and scheduled commercial financial institutions can also be used during KYC verification as mandated the RBI.
Why is KYC necessary?
As per the Reserve Bank of India, it is mandatory for all financial institution to collect KYC documents of their customers. The primary reason this being –
- Customer identification.
- Risk management.
- Strict guidelines to accept and reject new customers.
- Transaction monitoring.
What are the methods to complete KYC registration?
There are several methods by which you can complete your KYC registration. Not only can you visit the nearest branch of your financial institution and complete your KYC registration but also go to the official website of your financial institution and upload the required KYC documents.
KYC registration is an important factor that financial institutions consider before approving or rejecting loan and credit card applications. Moreover, providing the relevant KYC documents is vital to apply for premium cards, such as the Bajaj RBL Bank SuperCard.
There are also other methods of completing your KYC registration online, which is also referred to as eKYC. Such methods include Aadhar based eKYC and PAN based eKYC.
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