KYC means Know Your Customer is a process that helps the banks to find information about the identification of customers. RBI introduces this process of KYC.
Objectives
KYC is done to find the information about the customers before they enter into the financial business KYC monitors the transaction made by the customers
Requirements
Following documents are required to complete the procedure of KYC: DL PAN card Passport Aadhaar Card Voter ID Card, etc.
KYC Policy
Banks form their own policy as per the guidelines of RBI. Following factors must be followed while framing the policy: Banks must verify the identity of customers They should classify customers according to the categories of risk Banks should monitor the transactions according to the category of risk Regular update of the customers risk category
Benefits
Helps to identify the customersHelps to understand the activities performed by the customers KYC protects the customers form losses and frauds made due to inappropriate transactions
What is the necessity of KYC?
KYC helps to monitor the transaction of large amounts Checks the fraud related to transaction Monitors other illegal activities related to transactions
e-KYC
It is known as the process of online verification of customer identity using the Aadhaar card. This is done with the help of bank biometric authentication.