What Documents Are Required for KYC?

Know Your Customer (KYC) is a compliance procedure initiated by the Reserve Bank of India (RBI). The primary purpose of this compliance is to assess the customer risk and comply with the legal requirements of the AML (Anti-Money Laundering) laws.

Carrying out an effective KYC is all about knowing a customer's identity, the risk that they pose, and their financial activities. There are several documents required for a customer to complete their KYC process.

We will discuss more about the documents required for KYC for an Indian citizen, the type of KYC verification process one can consider, the submission procedure and more.

Why Are Documents Required for KYC?

The Reserve Bank of India initiated the KYC process as a part of compliance with the Prevention of Money Laundering (PML) Act and rules. The RBI introduced this process in 2004 and instructed all financial institutions to make KYC compliance mandatory for all their customers. 

The prime objective behind introducing the KYC documents for banks and other financial institutions is to ensure that all the financial transactions are carried out legally and comply with the anti-money laundering norms.

Moreover, KYC compliance also enables the authorities to track bank accounts that carry out malpractices, financial frauds, and transactions associated with terrorism funding, money laundering, or any other illegal offences.

List of Valid KYC Documents

Here is the list of valid KYC documents that would be required to be provided to the respective authorities for completing the KYC process:

• Proof of Identity (Any one of the following documents)
  • Aadhaar card
  • Passport
  • Driving licence
  • Voter ID
  • PAN card 
  • Photo ID cards issued by the Central or State government entities, public financial institutions and public sector undertakings
• Proof of Address (Any one of the following documents)
  • Voter ID card 
  • Driving license
  • Passport
  • Utility bills, such as water bill, electricity, gas bill, or telephone bill (not older than one month)
  • Ration card
  • Rental agreement
  • Sale deed
  • Passbook or bank statement containing the address

What Are the Types of KYC Verification Processes?

There are two types of KYC verification processes, and both are equally authentic and effective. It entirely depends on the level of convenience the applicant wants to avail. The types of KYC verification processes are as follows.

Online KYC or e-KYC

The e-KYC or online KYC is a verification process conducted online and can be convenient for anyone accustomed to internet connectivity devices such as a smartphone, tablet, laptop, or desktop, or those who cannot travel due to age, disability or health concerns. For this type, you must upload a scanned copy of your identity proof and address proof or produce your documents through a video call (Video KYC) to complete KYC.

In Person KYC

The KYC verification process is carried out offline in person. You can do this by visiting the bank, regulated entity or financial institution in person or visiting your nearest KYC kiosk to verify and authenticate your biometrics and KYC documents. Nowadays, banks and financial institutions also send a KYC executive to your place to conduct in-person KYC verification.

How to Submit the Documents Required for KYC to the KYC Registration Agency?

The documents for KYC that are required to be submitted to KYC Registration Agency (KRA) can be done using online and offline mode. 

Online or e-KYC

Here is the process of KYC document submission or KYC verification to the KRA using the online mode:

• Simply visit the official website of the KRA (KYC Registration Agency).
• Log in to the website using your mobile number.
• Scan the required documents and upload them in their respective field.
• Accept the terms and conditions and confirm the above-entered details to complete the process.

Offline or in-person KYC

Here is the process of KYC document submission or KYC verification to the KRA using the offline mode:

• Download the ‘Know Your Customer’ application form.
• Fill in the necessary details, such as your Aadhaar number, PAN number, etc.
• Visit your nearest KRA (KYC registration agency) office.
• Submit the duly filled KYC form along with the attached address proof and ID proof.
• Complete the biometric process if necessary.

Know Your Customer (KYC) is a compliance procedure introduced by the central Bank of the country. It was initiated to bring all the consumers of financial products under the anti-money laundering regulations. There are plenty of instances of money laundering that have come up and have given rise to a number of illegal trade practices. Thus, KYC verification was introduced to prevent such practices.

However, you must also be cautious regarding the ongoing scams and frauds in the market. Stay away from harmful or malicious sites on the internet, which can also result in financial scams in the name of KYC.

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