What are the Documents Required for KYC?

The need for security is paramount in a world where digital and offline transactions are increasing at lightning speed. As transactions increase daily, customers must have their accounts verified. For this purpose, the RBI, or Reserve Bank of India, has made KYC mandatory for banks and financial institutes. In this post you'll learn about the important documents required for KYC verification. You will also learn which documents are compulsory for the KYC procedure. Let's first find out a gist of KYC.

KYC – Understanding The Concept in a Nutshell

With the RBI mandating the regulations, KYC verification has become compulsory. It requires NBFCs, banks, money transfer agents, and payment providers to have customer information.

With this process, they can better understand and keep track of the customers and their financial activities. In a nation like India, KYC is not just a practice but a mandatory legal need. Now, how does a customer follow the KYC process?

In simple language, KYC revolves around documents that institutions and individuals must present. The KYC documents can simplify the verification. Providing the right documents ensures a secure process. So, which documents are the most important in KYC? Let's find them out:

Most Prerequisite Step to Follow in KYC – Providing the Right Documents

If you intend to complete KYC successfully, you need to share the documents required for KYC:

Your ID Proofs –

These are the most important ID proofs you need for your KYC process:

1. Your PAN Card

India's Income Tax Department issues a PAN, or Permanent Account Number Card. It's proof of ID required for financial transactions. Every individual has a unique 10-digit alphanumeric number that contains numbers and alphabets. Indians who pay taxes must have a PAN card.

Note that you need to present your PAN card with a photograph. Anyone might get your private data without including your picture in your identity. So, your PAN card should have your photo.

Your Aadhaar card is a universal identity for every Indian and is one of the documents required for KYC. Anywhere you travel, you need your Aadhaar number for verification. In short, it's a portable proof of identity for Indians. It comprises a unique 12-digit number issued by India's UIDAI, or Unique Identification Authority.

2. Your Passport

The passport is the official document that the government of India issues. It is your identity as an Indian citizen. This card contains your private details like, the following:

• Name
• Date of birth
• Photograph
• Address

3. Your Driving License

A driving license for an Indian citizen helps operate various motor vehicles. In different Indian states, they are administered by the RTA/RTO, or Regional Transport Authorities/Offices.

If you are a student, you may present an ID card issued by your college affiliated with a university. You may also show an identity card issued by any public sector, public finance institution, or commercial bank.

Address Proofs –

Your driving license is proof of your address. However, you can show your utility bills if you don't have a driving license or passport.

1. Your Utility Bills

Your utility bills verify your entities or individual address. It offers address verification as a first line of defense against any fraudulent acts. It's a quintessential part of providing your address proof for the KYC process. You may show any of these bills for the past three months:

• Post-paid phone bill
• Water consumption bill
• Electricity bill
• Gas receipt

You may show your ration card or address proof by a multinational foreign national bank. An applicant might have a self-declaration copy by a High Court or Supreme Court judge that shows your new address alongside a PIN code. You can also show your lease agreement, considering your residence.

You may also read this: paperless personal loan

2. Your Bank Account Statement

You also need a bank account statement issued by a financial institute. It's a proof of address required for KYC. Your statement should have the most current transaction updates alongside your address, bank name, and other details.

The following are other documents required for KYC that you may need to submit to complete the KYC process successfully:

• Credit card settlement is not more than three months old.
• Registered sale agreement.
• The lease is on the residence or maintenance bill of the apartment.
• Address proof issued to entities like bank managers of:
• Scheduled co-operative bank
• scheduled commercial banks
• Gazetted officers
• Multinational foreign banks
• Notary public
• Documents issued by any Statutory Authority or government
• Representatives elected to Parliament or the Legislative Assembly
• ID card (of Public Financial Institutions, Public Sector Undertakings, Statutory/Regulatory Authorities, Central or State Government or scheduled commercial banks)
• Sub-account or FII (Power of the Attorney given to Custodians by FII/sub-account with registered address proof)
• Your spouse's address proof might be valid for KYC.
• Bank Passbook (With Six Months of Updates)
• Play Slips (3 months)

Steps to Undertake While Proceeding with the Digital KYC Procedure

If you plan to follow the online process for the KYC process, you need to undertake these steps:

Step 1 – Visit the Official Website

The first step in KYC is to visit the official portal of a KRA, from where you wish to follow the KYC process. You must gather your private information. Such information is mandatory to include in the digital KYC registration form. You need to fill out the form on the portal by mentioning the details.

Step 2 – Enter Your Private Details and Upload Them

After you collect the details, you enter them and upload them online. Remember one thing: these KYC documents are your proof. So, you should not provide any fake information. Ensure whatever you upload is authentic and reliable.

Step 3 – Verification Occurs

Soon after you upload these documents, they will be verified against different screenings. After the documents are validated, information from them will be extracted. This process occurs in two different ways (as mentioned below):

• Directly extracted via the OCR, where the system gets data from your KYC documents.
• Data extracted without the OCR, wherein a candidate needs to enter the information manually into the portal.

Offline Process – Steps You Must Follow

The offline KYC process looks quite similar to the online one. But here, you need photocopies of your KYC documents and form. Let's find out the steps below:

1^st Step – In this step, you must first download and fill out your KYC form. You can get an official copy of the application form.

2^nd Step – You must enter your updated information while filling out the form. Do not miss out on any area. Enter your PAN and Aadhar details correctly.

3^rd Step – After you fill out the form, it's time to attach your identity proof and address to that form.

4^th Step – Now, visit the nearest KRA office to submit the form.

You will get a unique application number. After you receive it, check your KYC status on that KRA portal alongside your PAN card information. You might be asked to offer biometrics in certain scenarios.

Outlining the Types of KYC Procedures

Here's a rundown of various KYC procedures performed by many banks and financial institutes:

Video-Based KYC Process

If you wish to choose this KYC verification process, you need to complete the process with your bank remotely. The financial institute may connect with you via video conference. The professional may ask you to record the video reading the details mentioned in your Aadhaar or PAN card.

In-Person KYC Process

If you cannot choose the online process, you can consider an in-person KYC. The bank representative directly consults you and double-checks your details as mentioned in the original form. This process might seem less hefty.

However, one should note that this KYC verification process is time-consuming and includes paperwork hassles. Some financial institutes offer door-to-door KYC verification, where the bank representative visits your house to verify the KYC documents. This process is time-saving and effortless.

Digital KYC

Also referred to as e-KYC, candidates must fill out the form by entering their PAN and Aadhaar details. When you submit the form, ensure you upload their scanned copies for more convenience. However, candidates must have a mobile number registered with their Aadhar card for online verification.

Aadhaar Biometric Process

If you want to follow the Aadhaar biometric process, you must follow the given steps:

Step 1 – First, you need to visit the KRA's official website (one as per your preference).

Step 2 – After you visit the official KRA website, you need to share your Aadhaar card details. Once you share them, wait for an OTP to arrive at your registered number.

Step 3 – Then, you must request the biometric confirmation online.

Wait for an executive to visit your address (as mentioned in your form). The professional will confirm your original KYC documents along with biometrics. After that, your application is submitted.

Central KYC

Here, you need to submit the KYC documents to the central repository. CERSAI, or Securitization Asset Reconstruction and Security Interests of India, regulates this procedure. You will get a 14-digit KYC or KIN identification number. Soon after the data gets stored in the central repository, financial institutes, and banks will access it.

You may also read this: Personal loan on Aadhar Card

Finally-

So, this post has outlined the most important documents required for KYC. You have also learned the steps related to different types of KYC verification procedures.