On 8 February 2017, the Indian government replaced the KYC process with c-KYC in all financial institutions. The purpose of C-KYC is to give a platform to investors that help to complete their KYC. C-KYC can be done before interacting with different investors and financial sectors. After completing the C-KYC process, the investor is allotted a 14-digit unique KYC identification number(KIN). (KIN) which needs to quote by the investor while conducting any transaction.
Before knowing about the CKYC, it is important to know the exact meaning of KYC. KYC, or “Know Your Customer,” is a process prescribed bank reserve Bank of India. Banks are urged to collect information about the identity and addresses of the customers. The KYC technique is to be done by the banks while opening accounts. It is also applicable to an old account opened with KYC.
C-KYC provides a platform for investors to perform their KYC once. C-KYC approves an investor in transaction /deal with all portions governed or regulated by India’s government, without the need to complete various KYC formalities. C-KYC functions with every bank and mutual fund, and you won’t have to do this process again anywhere because one insurance company is enough. After the process is complete 14-digit identification number will be notified, known as KYC identification number or KIN. The KIN is unique for every person, and one has to mention this number whenever he/she is investing in any bank or mutual funds company.
C-KYC, also known as the Central-KYC, is a step that the government has taken for various reasons. One of the major reasons is that C-KYC will help bring all the KYC process under one umbrella. It would help the investors and the banks to work more easily with the help of C-KYC.
Types Of C-KYC Accounts
There are basically 4 types of CKYC account. Each of these accounts has different facilities.
1. Normal Account
To create a normal account, you have to provide any of the six official documents to the officer. You can choose the six documents: PAN, Voter ID, Aadhar Card, Driving license, NREGA job card, and passport.
2. Simplified Measures Account
If you want to create a simplified measures account, you have to provide other OVDs or Officially Valid documents. These are the documents that the RBI approves of, as per RBI/2015-16/42. Here, the KYC identifier is “L.”
3. Small Account
If you want to open a CKYC account but only want to provide your personal details, then you can opt for the option of a Small Account. In this type of account, the investor only has to provide personal details and a photograph. Here, the KYC identifier is “S.”
4. OTP Based eKYC Account
You can open this type of account by providing a photograph along with your Aadhar PDF file, which you had downloaded from the UDAI website. This PDF file should be enabled with OTP. Here, the identifier is “O.”
Difference Between KYC, eKYC & CKYC
The 3 terms KYC, eKYC, and CKYC are often misunderstood due to their names. But, these 3 terms are quite different from each other and have different purposes too.
The “KYC” or the Know-Your-Customer is the process that is used in various financial institutions like banks and mutual funds companies. Here, the investor’s identity is verified by the details that the inductor provides in the form. Not only that, but there is also an IPV or In-Person verification process, where an official check the details by visiting the investor in person. After the verification, the data of the investor is kept in the KRA registration system. The data is then uploaded to the database of the system. This is the most common process which is used everywhere.
eKYC or Electronic- KYC is verifying the details of the investor through his/her Aadhar number. With the details present in the Aadhar card, one can easily verify the details provided by the investor by checking it with the help of the Aadhar number. Here, the authentication is done by 2 processes. The first process is by providing a One time password or OTP and then verifying. The second process is by using biometrics. It is well known that the Aadhar card even takes biometrics to identify the person, and this can be used to verify the details.
E-KYC is a paperless process done using Aadhaar number, where the investors can invest only up to Rs. 50,000 per annum, per fund house. For more investment, investors can apply for c-KYC with proof of identity and housing with a photograph. Aadhaar is often used as proof of identity and address. E-KYC is faster than C-KYC.
CKYC or Central-KYC is the recent initiative that the government has taken. In this process, an investor-only has to do KYC once. The investor does not have to do the KYC process repeatedly and can save time in this. With the help of CKYC, an investor is saving from unnecessary waste of time of the bank and his/her own. With the growth in technology, people are feeling the need for CKYC due to its benefits. With just one KYC, all their work can be easily done, and people are adopting this method rapidly. The CERSAI specially handles this process, and people can get their CKYC done by following the procedure.
How to Get CKYC Done?
There is a certain process that a person needs to follow to get the CKYC done. For the first-timers, the investors have first to open a Savings Bank account or a Demat account. While doing this, you even have to submit a new CKYC form to the institute where you are opening the account.
After filling out the form, the person must submit it along with the self-attested documents and photographs. There will be an IPV or in-person verification process. After the verification is done, the person will get a 14-digit number. The person can use this number for the KYC process in other institutes.
Documents Required For KYC
There are certain documents that a person needs to submit for the process of CKYC. Here are the important documents which you should have for doing your CKYC.
- Properly filled CKYC form or the KRA application form along with an additional CKYC form
- Passport-sized photograph
- Self-attested copy of identity proof
- Self-attested copy of address
The CERSAI will then verify all the above documents and then provide with the 14-digit CKYC number.
How Does CKYC Work?
Before investing in mutual funds, a person has to verify his/her details in the bank. The KYC process is a mandatory process for people investing in mutual funds. However, it is tiring to do this process repeatedly while investing in new schemes and products. Due to this reason, the CKYC process came into action.
In the CKYC process, the person first has to do the KYC process. All the details of the KYC are then sent to the CERSAI for verification. Here, the person even has to fill out certain documents, which the CERSAI will verify. After the verification is done, the person will get a 14-digit CKYC number. Whenever the person goes to another mutual funds company for investing money, he/she will not have to do the KYC.
Here, the mutual fund’s company will send your CKYC number to the CERSAI. The CERSAI will provide the company with your verified documents, and the verification part is completed. You do not have to go through the KYC process again for investing money.
What Is The ‘KYC’ Identification Number Or KIN?
The KYC identification number or the KIN is the 14 digit number, which the CERSAI provides the investor after the CKYC process is done. This number is useful in many ways. Using this number, one can use the facilities of CKYC while investing in different mutual funds companies.
How To Check The CKYC Number?
If you want to check your CKYC number, you can do so by following the steps stated below.
- Log in to the website of any bank or financial services that provide the service of CKYC.
- Now, enter your PAN number in the portal.
- A security code will appear on the screen. Enter the code in the dialog box
- Now, your CKYC number will appear on the screen. Note down the number for future uses.
How To Check The Status Of CKYC Application Form?
After submitting the form, it takes some time for the CERSAI to verify the form and provide the CKYC number. The CERSAI takes 3 days to upload the details on the CKYC platform.
After that, the verification process starts. If all the details and documents are up to mark, then the CERSAI generates the KIN number. This KIN is a 14 digit number, which is also known as the CKYC number. You would get the KIN within 4 to 5 days through SMS or email.
There is also the method of checking the status of the CKYC online. You have to visit Karvy’s KYC portal. Enter your PAN and the security number, after which you would easily see the status of your CKYC.
If you have not received your KIN, then you can go to the financial institution from where you have done the CKYC and enquire about the status. The officer in position would help you know the current status of the form and even give the details if there is any delay.
Benefits Of Central KYC
There are certain benefits that an investor can get if he/she gets CKYC done. Some of the major benefits of CKYC are stated below.
- CKYC helps the financial companies in verifying the documents easily
- It saves the investors’ time as they don’t have to go through the KYC process again and again.
- The investors can update their details at any time in the CKYC registry.
- The CKYC number is applicable everywhere. One can use it for an insurance policy, for investing money, or even in stock markets.
These were some of the major advantages that the investor and the financial companies get from the CKYC registry. Due to these reasons, all financial companies are rapidly shifting to CKYC.
Features Of CKYC
Some of the major features of CKYC are mentioned below.
- The CKYC number is a 14-digit number, which is linked with the ID proof of the person.
- The investor/customer’s data is stored in the electronic format safely.
- The documents of the investor are verified properly.
- Whenever the person changes or updates any information in the CKYC registry, all the institutes are informed.
How To Update Details In CKYC Account?
The details of a person continuously change due to various reasons. The person needs to update these details regularly in the CKYC registry. To update your details in the CKYC registry, you have to follow a simple procedure. You have to download the form from the official website of CERSAI.
After downloading, you can see that there is an option of “Update” in the form. Click on the option and then fill out the new details. After filling out, submit the form. The CERSAI will verify the new details and then update them accordingly. The new details will even be sent to the institutions where you have invested.
Role Of KYC In Banks
Banks are requested to keep id and address proof of their customers while opening accounts. Also to update their customers KYC details occasionally. The topic is to enable the identification of customers by their respective banks and to prevent money laundering. This process will help to ensure that a bank’s data is not misused.
C-KYC Other Attributes:
- C-KYC is acceptable to individuals (resident individuals and non-resident individuals [NRIs]).
- C-KYC charges money to FI’s for accessing KYC data. The charges for creating, downloading, and update a record are 0.80 INR, 1.10 INR, and 1.the 15 INR.
- C-KYC requires more information [investors name, mothers name, foreign account].
1. What Is The Use Of A C-KYC Number?
C-KYC consists of a 14-digit identification number linked with ID proof, in which customers’ data is safely stored. CKYC details are used for investing in mutual funds or for buying any financial product.
2. How To Receive A New C-KYC Number?
1. You would like to transfer and print the application form.
2. Fill in all the personal information required.
3. Add your PAN number.
4. Add your address and identity proof.
5. Attach a passport size photograph.
6. Sign the form and submit it to the provider.
7. Submit an investment application form if asked.
3. Is one c-KYC number enough for all investments?
Yes, once the process is obtained successfully, the number will be valid and used for all investments.
4. How to be C-KYC compliant?
1. Visit any bank or mutual fund house.
2. Fill the C- KYC form for a new application or update the existing one.
3. Add a self – attested proof of identity.
4. Add a self-attested proof of housing.
5. Submit a photograph.
5. What is CERSAI?
CERSAI: Central written account of securitization plus Reconstruction and interest. The government of India authorizes CERSAI as a central online security interest registry. CERSAI is mentioned as central KYC records registry under the Prevention of money- laundering rules 2005. CERSAI includes receiving, storing, safeguarding the KYC records of the clients in digital form.
6. Can the C-KYC number be used for all investments?
Yes, one C-KYC number can be used for different investments once you have completed the process.
7. Is PAN mandatory for C-KYC?
No, PAN is not mandatory for C-KYC, but for security market KYC, it is needed. C-KYC is used by the institutions which do not consider PAN as mandatory for any purpose. Security markets declare it to be mandatory. If PAN is required, the C-KYC type should be normal. If not required, then it should be PAN exempt investors. If PAN is not added, the father’s name should be there.
8. Two different names valid or not?
The name of the person in C-KYC is must match with the identity proof provided.
9. How will you get KIN information without an email ID or phone number?
Verification of any information related to KIN is sent to the SMS / email of the provider. If the email or phone number is not submitted, the user should contact the entity to which the form was submitted. It is good to submit a mobile number or email id for receiving every detailed information.
10. Is the date of birth mandatory for C-KYC?
Yes, the date of birth is essential information, and it is mandatory for C-KYC appliances.
11. If the application is rejected, will you receive any notification?
No, if the application is rejected because of any reason, you will not receive any information. If any queries arise, then an applicant from CERSAI will try to contact you.
Central KYC is beneficial for financial sectors and will help in the long run. The C-KYC system is not utilized effectively because it’s new to investors; hence, the transition is not smooth. Data and information of non- individuals still rest with SEBI, and there are no guidelines yet on how this has to be included in the c-KYC. Banks will have to face the challenge by recording updates on c-KYC. If the changes are not done, other banks may open an account. Based on the existing c-KYC records, and will cause an open challenge to the entire banking system.