2023-10-02

Everything To Know About KYC

What Is KYC?

“KYC” stands for “know your customer” or “know your client,” and it refers to the methods that are used to verify a customer’s identification and assess the risk of conducting business with them. It’s a set of data-driven processes that follow a set of rules and regulations.

Those procedures serve as a line of defense against financial crimes, such as tax evasion and terrorism financing, to name a few. Companies and even governments that fail to comply with KYC laws must expect legal repercussions.

Benefits Of KYC

The KYC process, which is required by law, benefits financial institutions in various ways: These client onboarding procedures aid in the detection and prevention of money laundering, terrorism financing, and other forms of illicit corruption.

Limits fraud is caused mostly by the concealing of one’s identity: ID card verification, face verification, document verification (such as utility bills as evidence of address), and biometric verification are all part of the KYC procedure.

Prevent laundering and other anti-social: Money laundering aims to hide a variety of crimes, from minor tax evasion and drug trafficking to public corruption and the funding of terrorist organizations. The KYC procedure tries to thwart such schemes right from the start of the deposit process.

Brings the country stability and safe investment: Since KYC makes transactions safe, it improves the financial framework’s trustworthiness and reduces risk. It also ensures that a country’s economy is healthy by regulating the amount of money in circulation.

Therefore, the financial sector has robust Know Your Customer (KYC) systems in place to verify that their clients are not involved in money laundering or criminal organization

Documents Required For KYC

 Accepted Documents for Customer Profile:(All original documents)

• Citizenship Certificate
• Passport
• Driving License
• Voter ID Card 

Accepted documents for Merchant

• Company’s Logo PAN registration, Company Registration / VAT / Tax Clearance documents.

Conditions for rejection of documents submitted for KYC

• Details and papers that have been filled in do not match.
• The materials you’ve uploaded aren’t very clear.

 Conditions for rejection of photo submitted for KYC

• It is not acceptable to use a photograph taken from any form of document.
• It is not permissible to use a photo from a photocopied document. Only scanned photos in pp size are accepted.
• Filters are not permitted in photographs. Photos in black and white are also not permitted.
• Only pp-size photos from the last few years are accepted. It is not permitted to utilize an old photo or one that was included in the document at the time of issuance.
• It is not permitted to submit a photo that is blurred.
• A formal photo is not required, and KYC verification will only be required if the user’s ears are visible. The images will be accepted till the face is recognized enough.
• It is not permissible to take a photo with the user’s head turned away from the camera.
• It is not acceptable to submit a photo with an overlapping signature and stamp.
• The use of a camera flashlight in a photograph is not permitted.
• A shot with any kind of face reflection is not acceptable.
• It is acceptable to take a photo with someone wearing spectacles. A shot in which a person is wearing sunglasses, a hat, headphones, or any other accessory that obscures the face is not appropriate.