The Central Know Your Customer Registry (CKYC) is a centralised depository of KYC documents of customers availing various services of the financial sector. CKYC is created with the intent to reduce the burden of submitting KYC documents for verification when starting a new financial relationship with a new finance company.
1.Background of CKYC
Section 73 of the Prevention of Money Laundering Act, 2002, gives the central government the authority to frame various rules and regulations to curb down on the black money. With this authority, the Central Government introduced CKYC to ensure one KYC for individuals to buy or invest in financial instruments. The Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI) is the supreme body that manages the CKYC registry.
2.Features of CKYC
- CKYC is a 14 digit number linked with the ID proof.
- Customer’s data is safely stored in an electronic format.
- The documents submitted are verified with the issuer.
- All the concerned institutions are notified when there are changes in KYC details.
3.How CKYC Works?
It’s inevitable that you undergo the process of CKYC if you are a potential stock market or mutual fund investor. When you approach a fund house to invest, you would first be asked to fill the KYC form and submit the supporting documents. These documents would be sent to CERSAI and you would be allocated with a 14 digit CKYC number.
If you wish to invest in another mutual fund house, then you would not be in need of submitting the documents for verification. The mutual fund house would request CERSAI to furnish your documents by submitting your CKYC number. CKYC makes your process of investing easy and hassle-free.
4.Impact on Existing Mutual Fund Investors
The existing mutual fund investors are not required to undergo the process of CKYC. However, this might change in the future. If an existing mutual fund investor decides to invest with a new mutual fund house, then he/she must mandatorily undergo the CKYC process.
5. How to Check CKYC Number?
You can check your CKYC number through various financial services company by following these steps:
- Log on to the website of any financial services company offering CKYC check.
- Enter your PAN.
- Enter the security code displayed.
- Your CKYC number would be displayed.
6.Types of CKYC Accounts
There are four types of CKYC accounts, they are as follows:
- Normal Account: Normal accounts are opened when you submit any of the following six official documents as proof of identity: PAN, Aadhaar, Voter ID, Driving License, Passport, and NREGA Job Card.
- Simplified Measures Account: This type of CKYC account will be opened if you submit other officially valid documents (OVDs) that are allowed as per RBI circular RBI/2015-16/42. The KYC identifier for these accounts will be prefixed by ‘L’.
- Small Account: This type of account is opened when you submit only personal details along with a photograph. The KYC identifier for these accounts would be prefixed with ‘S’.
- OTP Based eKYC Account: This type of account is opened if you submit a photograph along with Aadhaar PDF file downloaded from the UIDAI website, which is enabled by an OTP. The KYC identifier for these accounts would be prefixed with ‘O’.
7.Benefits of Central KYC Registry
- CKYC registry enables financial companies to verify documents at ease.
- Investors need not submit KYC documents each time before starting a new financial relationship with a new financial company.
- Investors have access to update their details in the CKYC registry.
- You can use CKYC number when buying or investing in various financial instruments such as an insurance policy, investing in mutual funds, and stock markets.
The modern world is such that people want things to happen in a matter of a few minutes. The old process of starting a financial relationship with a financial company was tedious and you had to submit KYC documents. With the introduction of CKYC registry, the documentation process has become simpler, quicker and, most importantly safer.