KYC Update: You must have visited the bank. At the time of opening an account, you are asked for your identity (KYC). Meaning ID and address proof. Meaning documents like PAN Card, and Aadhaar Card. But, why? Because this lets the bank know your KYC. The documents given by you are to strengthen your identity as KYC. But, even after opening the account, many times the bank asks you to update your KYC. But, the question must be coming to the mind that we have got KYC done, then why? This also happens because we do not have complete information about KYC. Today you will get answers to all the important questions related to KYC.
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What is the meaning of KYC?
The full form of KYC is Know Your Customer, that is, to know your customer. This is a process in which banks and financial institutions verify the identity and address information of the customers.
Why is KYC necessary?
The KYC process helps prevent illegal activities such as money laundering, fraud, and terrorist funding. It ensures that banks and financial institutions serve only the right customers.
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Which documents are required for KYC?
Documents like an Aadhaar card, PAN card, passport, and voter ID are required under KYC. These documents are necessary to confirm your identity and address.
How is KYC completed?
The customer has to submit the required documents for identity and address. The bank checks them, verifies the necessary information and after this, the banking services start.
KYC rules for new customers
If you open a new account, then it is mandatory to complete the KYC process. You can avail of banking services only after submitting documents and verification.
Why do old customers have to update KYC?
From time to time customers have to update their KYC. If you have submitted old documents which are no longer valid, then the bank will ask you for new documents.
What can happen if you do not update KYC?
If you do not update KYC, the bank can temporarily stop your services. Transactions from your account may also be stopped.
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What are RBI’s KYC guidelines?
RBI issues rules related to KYC from time to time. New guidelines were issued in the year 2023, which all banks and NBFCs are required to follow. High-risk accounts are better monitored. KYC data is regularly updated in the Central KYC Record Registry (CKYCR). If a bank is found not following the rules properly, strict action will be taken against it.
When is KYC required again?
If the validity of your KYC document has expired, or the document submitted is no longer valid, the bank may ask you for new documents.
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What other things should you know about KYC?
KYC is necessary not only for bank accounts but also for government schemes, insurance policies, and financial transactions. Keep it updated on time so that there is no problem.
