scorecardresearchBefore You Start Investing – What is KYC?

Before You Start Investing

What is KYC?

KYC or ‘Know Your Customer’ is the process of verifying the identity and address of all customers and clients by almost all financial institutions such as banks, brokerages, insurers, AMCs, depositories, lenders, card issuers etc. The RBI has made KYC mandatory for all banks, financial institutions and any other digital payment companies who carry out financial transactions. So, think of it like the license necessary to commence financial transactions. 

As per the guidelines issued by the government Aadhaar, Passport, Driving license, PAN card, Voter ID, Utility bills (not more than three months old) or address proof issued by managers of scheduled banks, notary or a gazetted officer are among some other documents that are accepted as address proof.  
There are two types of KYC – Aadhaar-based eKYC and the offline in-person verification KYC. The former has limits up to which you can transact, whereas the latter has no such limitations. Even though you may be KYC verified, institutions may from time-to-time ask you to refresh your KYC.