The list of KYC documents you must submit while availing of financial facilities?
When you sign up for a service from a financial institution, you typically have to complete a documentation process. For instance, when you open a savings account, a DEMAT account, or apply for a loan, the bank asks you to provide some specific documents. You also have to complete a mandatory process known as KYC compliance. Short for 'Know Your Customer', KYC is an essential process through which the lender assesses your authenticity as a customer. In this article, we explain what is a KYC document along with the generally accepted KYC documents. Read on.
A KYC document is typically a government-approved document that gives a financial institution basic information pertaining to their customers' identity, address, and income. Such a document enables financial institutions to validate their customers' identities and safeguard themselves from offering their facilities to anyone involved in illegal or fraudulent practices.
The financial institution generally shares a KYC documents list, from which you can provide one copy of your identity, address, and income proof.
The following are the most widely accepted KYC documents.
Any document with your photograph embossed on it is considered an identity proof document. You must provide any of the following ID proof documents to complete the KYC process.
Financial institutions also ask for your permanent and current address proof documents (if the two are different). The KYC documents list for accepted address proof documents includes the following.
The KYC process was introduced in 2004 by the Reserve Bank of India – the Central Bank of the country. The RBI prohibited financial institutions from providing any services without the mandatory KYC compliance process. The idea behind introducing KYC documents for bank was to ensure all financial transactions were conducted in a legal, above-ground manner. KYC compliance enables the concerned authorities to track bank accounts conducting financial frauds and transactions associated with money laundering, terrorism funding, and other grave criminal offences.
Today, you can complete the KYC verification process offline and online. Most financial institutions enable you to hand over the KYC documents in person at their branches or submit them electronically. Since you can open bank accounts and apply for loans online, you can opt for the e-KYC or video KYC process. With e-KYC, you can attach scanned copies of your KYC documents and complete the KYC process through a video call with a bank representative. Indeed, completing the KYC verification is as simple as it is effortless.
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*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.