KYC or ‘know your customer’ is a mandatory verification procedure carried out by financial institutions with the goal of minimising illegal activities. Since 2004, the Reserve Bank of India has prohibited individuals to open a bank account, trading account or demat account without fulfilling the KYC procedure for KYC.
For any kind of financial transaction, you need to go forth with the KYC process. Once the KYC verification process is done, you have to give the financial institution that has conducted the test information about your identity, address, and financial history. This can aid the bank in knowing that the money you chose to invest was not for any illegal activities.
A list of documents are required for the KYC verification process, which almost takes just a few mins or hours to complete. These documents are listed below:
KYC documents list
The documents that are required need to be submitted as hard or scanned copies depending upon the type of KYC. Two broad sets of documents are required for KYC: proof of identity and proof of address, which can overlap, but generally vary. The documents required are as follows:
For Identity Proof
- The UID or unique identification number that comes with an Aadhar card. You can also use your voter ID, passport, or driving license.
- Your PAN card with photograph.
- An essential document bearing the photo of the applicant. This needs to be issued by the State or Central Governments.
- An identity card that is issued by scheduled commercial banks, public sector undertakings, or any public financial institutions.
- Finally, identity cards that are issued by your college, provided that the college is affiliated with Universities or any identification document provided by professional bodies like the ICWAI, ICAI, Bar Council, ICSI, etc.
- Any credit or debit card issued by a bank to an individual bearing the individual’s name and address.
For Address Proof
- Voter’s card/Passport/Driving License/ Registered Sale Agreement is required or Lease on residence/Maintenance bill of the flat is valid too.
- Your electricity or gas bill, telephone bill, and bill for water consumption are valid too. These bills must not be more than three months old.
- A self-declaration provided by the supreme or high court judges gives the applicant a new address which might be required in case the applicant is convicted for any reason.
- Address proof for KYC can also be issued by any of the following entities: the bank managers of Scheduled co-operative banks/scheduled commercial banks/ Gazetted Officers/ Multinational Foreign Banks/Notary public/Documents issued by any Statutory Authority or government/any representatives that have been elected to the Legislative Assembly or Parliament.
- An identity card by any of the following entities: Statutory/Regulatory Authorities, Public Financial Institutions, Public Sector Undertakings, Central and/or State Government or any of its Departments, Scheduled Commercial Banks.
- Finally, identity cards with the address printed on them issued by your college, provided that college is affiliated with Universities or any identification document provided by professional bodies like the ICWAI, ICAI, Bar Council, ICSI, etc. to students.
- For any sub-account or FII, the Power of the Attorney that is given to the Custodians by the FII/sub-account with the registered address needs to be taken.
- Address proof for KYC in the name of your spouse is valid too.
Types of KYC verification
There are two types of KYC verification processes. They both are equal in terms of their authenticity and it is a matter of convenience whether one chooses to opt for one type over the other.
- The first type of KYC verification is defined as an online verification process, which is highly convenient for those with broadband or an internet connection. You need to upload a scanned copy of the original Aadhar card for this type of KYC. If you wish to invest in a mutual fund, with Aadhar based KYC the opportunity to do so is only up to ₹50,000 a year.
In-Person based KYC
On the other hand, in-person KYC verification is carried out offline. To do so, you can choose to visit a KYC kiosk, or mutual fund house and authenticate your identity using Aadhar biometrics. You can also call the KYC registration agency to send an executive to your home or office to carry out this verification.
