KYC Full Form is Know Your Customer. It was introduced in the year 2002 to avert fraud and money laundering. In 2004 KYC was made mandatory by RBI for banks/financial institutions and intermediaries to carry out KYC for all their customers. Eventually. It was made mandatory for all other regulatory bodies to carry out KYC. KYC is basically a process to establish the whereabouts (address) and the identity of the individual.
KYC Full Form, i.e., Know Your Customer is a process carried out to authenticate the address and identity of the customer who intends to perform transactions like opening a bank account, investment in mutual funds, fixed deposits, etc. KYC is done by verifying the documents that are acceptable as Proof of Address and Proof of Identity of the customer. For instance, Aadhar Card, Voter’s ID Card, Passport, Driving Licence etc., are documents accepted both as Address Proof and Identity Proof. Once the KYC process is complete, the Central KYC Records Registry will provide a unique identification number known as the Know Your Customer Identifier.
It was made mandatory for the banks/financial institutions to complete the KYC Process for all the existing as well as new customers before offering any services to them.
The following are the Proof of Address and Proof of Identity that can be submitted to complete the KYC process.
Proof of Address
Proof of Photo Identity
There are two types of KYC.
Aadhar based KYC
The KYC done online using the Aadhar details is online KYC or Aadhar based KYC. However, every time the Aadhar based KYC is done, the customer is allowed to invest only Rs. 50000/- per fund.
If the customer wishes to invest a higher amount, he/she should opt for In-Person Verification. The customer can also visit the KYC kiosk or the KYC Registration Agency for In-Person Verification of the KYC documents. The customer can also request the KRA official to visit the home/office for In-Person Verification.
The In-Person Verification can be done by displaying the original KYC documents through a Video Call to the Mutual Fund House. Once the IPV is done, the threshold limit of Rs. 50000/- for investment in a mutual fund will be relaxed.
In the offline KYC process, a representative of the bank/financial institution will personally visit the customer to verify the KYC documents. A copy of the KYC documents have to be produced, and the representative will authenticate the profile of the customer to complete the KYC process. This KYC full form process is also known as In-Person-Verification (IPV).
The different ways of KYC process are
Online KYC can be done in two ways.
In the Aadhar OTP method, the KYC will be completed in minutes, whereas in Aadhar Biometric Verification, the customer has to call the KRA to get one of the officials to visit either the home or office to do the biometric verification.
Simple steps in Online KYC using Aadhar OTP are given below:
If online KYC is done, customers are permitted to invest only up to a maximum of Rs. 50000/- in any fund. But if the KYC is done using Aadhar Biometric Verification or In-Person Verification, then the specification of the maximum limit of investment will be lifted.
The steps involved in the Offline KYC process is given below:
Aadhar Paperless Offline eKYC can be done using e-Aadhar that bears the digital signature of the competent authority of UIDAI. The e-Aadhar can be shared with any service provider or Offline Verification Seeking Entity (OVSE) by any Aadhar Cardholder. The e-Aadhar can either be in XML or PDF format. It can also be in a printed document in QR format.
On browsing through the above article, you will get to know the KYC Full Form, the importance of KYC and the different ways of carrying out KYC. You can adopt any method for KYC that is convenient for you.
Now nobody can stop you from investing funds within Rs. 50000/- or investing funds without limitation by performing the KYC as required for each kind of investment.
KYC Full Form is Know Your Customer. The ordeal of KYC is done to establish the whereabouts and the identity of the customer before offering any services. The e-process of KYC was introduced to put a check on fraud and money laundering. KYC is mandatory for investments like mutual funds, fixed deposits etc. and also to open an account in banks/financial institutions.
No, investments are not allowed without the completion of KYC.
KYC verification done digitally online is eKYC.
IPV is a must for investments above Rs. 50000/-
KYC verification is done free of cost.