KYC Process: How Does The KYC Process Works? - Loan Trivia


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Wednesday 13 April 2022

KYC Process: How Does The KYC Process Works?


The KYC acronym stands for Know Your Customer. Indian banks, insurance companies, and other financial institutions must follow this process before executing transactions with prospective customers. An identity check consists of verifying the customer's name, address, occupation, social status, financial history, and other personal information for your online eKYC Verification.

KYC: Why is it necessary?

By requiring KYC, financial institutions can verify transactions and investments made in a real person's name. By doing so, you help reduce the number of illegal practices such as money laundering, fraud, or financing of illegal activities. KYC Process compliance is required to open a bank account, open a Demat account, invest in mutual funds, or open a Demat account. A credit report is even required if you apply for a Personal loan or a home loan.

Different types of KYC

KYC in India consists of different verification processes depending on the type. Among them are

  1. KYC based on Aadhaar  
  2. In-Person Verification or Offline KYC  
  3. Centralized KYC 

Basically, KYC Process establishes and records the client’s true identity by using official documents. You must submit the minimum documents and information that include the following: name, present address, date, and place of birth, nationality, nature of work, contact information, tax identification number, specimen signature, and source of funds.

Documents proving your identity are also needed, and those get verified by billing statements or employment records. There are many ways to online eKYC Verification with your identity:

  1. A duly authenticated official document is required to verify the date of birth.
  2. Evaluate utility bills, bank statements, or credit card statements to verify the permanent address or visit the address personally.
  3. Calling, emailing, or writing to the customer.
  4. Authentication of identification documents is determined by proof of their issuance, for example, by asking the issuing authority for certification.

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