Understanding KYC and CKYC: What every financial consumer needs to know

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05 Apr 2024

Demystifying KYC and CKYC for Financial Consumers

KYC and CKYC carry a significant weight in today’s fast-paced world. Understanding the difference between these terms and grasping the importance of CKYC can streamline your financial dealings. Let's dive deeper into these concepts and explore what documents are required for CKYC.

KYC vs. CKYC: Understanding the differences

Let’s understand the differences between KYC and CKYC first:

KYC (Know your customer)

KYC, as the name suggests, is about getting to know your customer. It's an essential process implemented by financial institutions to verify the identity of customers and reduce the risks associated with financial crimes such as money laundering and fraud. Individuals are required to submit specific documents to establish their identity, address and other relevant details under KYC.

CKYC (Centralized KYC)

CKYC takes the principles of KYC a step further by centralising the process. It's an initiative introduced to create a centralised repository of KYC records accessible to all financial institutions. The objective is to eliminate the duplication of KYC efforts, streamline the process and enhance efficiency. Individuals undergo the KYC process only once and their details are stored in the centralised repository for easy access by participating institutions with CKYC.

Why does CKYC matter?

In today’s fast-moving world, CKYC simplifies the onboarding process for customers. Instead of submitting KYC documents separately, individuals undergo the KYC process once, saving time and effort. CKYC enhances efficiency for both parties. It reduces the risk of fraud and identity theft by centralising KYC records. CKYC ensures compliance with regulatory requirements.

Understanding the process to complete CKYC and generate a 14-digit number

Completing the Central Know Your Customer (CKYC) process involves several steps to ensure compliance with regulatory requirements and to establish the identity of the customer.

  • Initially, individuals need to fill out the CKYC application form with accurate personal and financial information.

  • Next, they must provide supporting documents such as an Aadhaar card, PAN card, passport and proof of address.

  • Once the form and documents are submitted to a CKYC registration agency, they are verified and processed.

  • Upon successful verification, a unique 14-digit CKYC number is generated, linking the customer's information across various financial institutions.

How can one check CKYC status and where to find CKYC’s 14-digit number?

Individuals can visit the CKYC Registry website or approach their financial institution where they completed the CKYC process to check CKYC status and locate the CKYC 14-digit number. Users can navigate to the "Check CKYC Status" section and enter their PAN or CKYC number to verify their status on the CKYC Registry website. Alternatively, individuals can contact their financial institution's customer service department and inquire about their CKYC status and the associated 14-digit CKYC number. It's important to keep this number secure as it serves as a unique identifier linked to the individual's KYC information across various financial institutions, facilitating smoother transactions and compliance with regulatory requirements.

Documents required for CKYC

While the specific documents required for CKYC may vary, the following are commonly requested documents:

  • Proof of identity: This may include documents such as an Aadhaar card, passport, driver's license or PAN card.

  • Proof of address: Documents like utility bills, bank statements or rental agreements can serve as proof of address.

  • Photographs: Recent passport-sized photographs are typically required for KYC verification.

  • Additional documents: Additional documents such as income proof or employment details may be requested.

Disclaimer: It's important to ensure that the documents submitted for CKYC are valid, up-to-date and in compliance with the requirements. Failure to provide accurate and complete documentation may delay the CKYC process.

In conclusion

Understanding the difference between KYC and CKYC and recognising the importance of CKYC can streamline your financial link. CKYC enhances efficiency, reduces risk and promotes regulatory compliance. So, the next time you encounter these acronyms, consider registering for CKYC for smoother financial transaction.

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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.