Updated: May 1, 2020
We live in a time where identity forgery, signature forgery and phishing is a very common thing. Suppose a man goes to a bank and says his name as X and borrows an amount. What if the details he gave is incorrect? What if he runs away with that amount? It will be the bank, who will have to suffer and bear that loss. So, it is very important for any of the lenders whether it is a bank or an NBFC to have the complete and right knowledge of your customers especially when you are a financial organization or even if you are a businessman it is very important to KNOW YOUR CUSTOMER.
Knowing your client plays the most important role to protect your financial institution or Business from fraud and illegal transactions and reduces the risk factor. Because of all these things RBI introduced KYC in the year 2002. This KYC has some guidelines to know a customer in a better and efficient way.
When KYC is needed?
Opening a new bank account.
While applying for a credit card.
To have a locker in the Bank.
While applying for any kind of loan such as a personal loan or home loan.
Document for Identity proof.
Document for Address proof.
Acceptable KYC Documents for a Loan
Photo Identity Proof
Residence Address Proof
Residence Ownership Proof
Job Continuity Proof
What is eKYC?
An e-KYC is a paperless and imitation verification strategy for online confirmation in view of the Aadhaar card. By eKYC, you authorize yourself to the unique identification Authority of India (UIDAI) which is done by providing your Aadhaar card no. By doing this you are providing your personal details such as your name, gender, age, address, and even your thumb and eye retina impression. So basically Digitalization of KYC is done by linking your Aadhar card electronically to Banks and other required places.
Benefits of eKYC-
eKYC is basically the Digitalisation of KYC which has undoubtedly reduced the processing time.
This has reduced the risk of Fraud and Forgeries.
This has eliminated the paper cost and cost of storage too.