Conduct KYC status check online to find out if you are KYC compliant
KYC or Know Your Customer is an identity and address authentication process that financial institutions must follow to verify you are who you say you are. The Reserve Bank of India (RBI) made KYC mandatory for all banks and Non-Banking Financial Companies (NBFCs) to prevent fraudulent activities. If you are not KYC compliant, you cannot access essential financial services like opening bank and trading accounts, obtaining loans, etc. If you are wondering 'how to check my KYC status', keep reading.
Your KYC status tells you whether or not you are KYC compliant, i.e., if financial institutions have authenticated your identity and address proof before offering their services. Being KYC compliant indicates that you comply with the Prevention of Money Laundering Act, 2002. Your KYC status can either be registered, under process or rejected.
You can check your KYC status online through KYC Registration Agencies (KRA). These agencies are registered with the Securities and Exchange Board of India (SEBI). Other financial entities can access customer information from KRAs. The KRAs in India are as follows:
You can conduct your KYC status check online by visiting any of the KRA websites. Just follow these steps:
You should be KYC compliant before you make financial transactions because:
It helps prevent financial crimes: Banks and NBFCs authenticate your identity with KYC. They can mitigate risks and prevent financial crimes, including money laundering, identity theft, embezzlement, terrorism financing, etc.
It assists with seamless financial transactions: If you are transferring funds, investing in mutual funds, applying for credit cards, buying insurance policies, or trading in the stock market, you must complete your KYC verification first. Without it, you may not open accounts in such institutions.
The Know Your Customer process is both legal and mandatory in India. Financial institutions can be penalised for not following the required protocols. Moreover, as a customer, you cannot access financial services without being KYC compliant. KYC status check can be done online using your PAN number.
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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.