Know your Customer or KYC is a fairly familiar term to all of us as it is required whenever we are making a financial interaction like opening a bank account or even registering on an UPI payment application.
While the KYC is very necessary, it can be a lot of hassle as it involves producing documents pertaining to your identity and address. To make this process less tiresome and hassle free, the cKYC or Central KYC was introduced. This cKYC works for both large financial organisations and for individuals. cKYC plays a very important role in relieving the pressure of going through various KYC transactions.
It saves you from the hassle of KYC verification during every financial interaction which helps a lot of processes to run much quicker and smoother.
cKYC or the central KYC is a centralised repository of KYC records of customers availing financial services. The cKYC was first introduced in the union budget of the year 2012-2013. This is a directive of the Indian Ministry of Finance and has been in operation from the year 2016.
The aim of the cKYC directive is to create a single platform for customer verification and reduce the hassle of the KYC verification process every time an individual has a financial interaction. cKYC aims at creating a single database where all the KYC information of all customers is verified and stored, this database is called the Central KYC Records Registry or the CKYCR.
The cKYC is managed by the Central Registry of Securitisation Asset Reconstruction and Security Interest of India or CERSAI and helps to reduce the burden of producing various KYC documents for verification.
Unlike the KYC verification which needs to be done at every step, the cKYC needs to be verified just once before availing any financial services. You get a 14 digit KYC identification number or KIN on your registered mobile number or email on completing the cKYC verification by providing the required documents.
You can use this KIN for KYC verification anytime you want to avail financial services with any other bank or insurance company. This helps to make the whole KYC verification process much easier and hassle-free.
Before you invest in mutual funds, it is mandatory to have your KYC verification done. If you don’t already have a cKYC, you will be asked to fill out a KYC form and produce the necessary documents, which will be then verified and you will be given the 14 digit KIN. but if you already have a KIN, you wouldn’t need to produce all the documents again and you can just submit your KIN through which the CERSAI will identify and verify your documents.
Therefore, having a cKYC will make the investment process much easier and hassle free for the mutual fund investors.
There are basically 4 types of cKYC accounts— normal account, simplified measures account, small account and OTP based eKYC account. Let’s look at all these accounts separately to understand them a little better.
You can create a normal cKYC account by submitting any of the six official documents as a proof of identity including Aadhaar card, PAN card, Voter’s ID, Passport, driving license and NREGA Job card.
The Simplified Measures account is a type of cKYC account which can be created by submitting other officially valid documents or OVDs which are allowed by the RBI circular RBI/2015-16/42. The prefix “L” is assigned to the KYC identifier for these accounts.
Small cKYC account can be created by submitting only your photograph with some personal details. The prefix “S” is assigned to the KYC identifier for these accounts.
You can create this type of account by submitting a photograph along with a downloaded PDF file of your Aadhaar from the UIDAI website which can be only accessible by an OTP. The prefix “O” is assigned to the KYC identifier for these accounts.
The cKYC is very beneficial as it reduces the hassle of KYC verifications every time you want to avail any financial services. cKYC has a few salient features which are as follows:
One must submit the following documents for registration:
After successful registration, the applicant will be provided with a 14 digit KYC Identifier Number (KIN). An SMS/email will be sent by CERSAI to the applicant’s registered mobile number once the KIN is generated.
To check CKYC number and status online, one can access the web portal of financial institutions that offer a CKYC check facility such as Karvy or Central Depository Services Limited. Follow these steps:
cKYC is beneficial in a lot of ways; the main benefit being the easing of the KYC verification process. Some more benefits of the cKYC registry process are as follows:
cKYC is a great initiative to reduce the burden of the KYC verification process. This is beneficial for both the customers and the financial institutions.
Getting a cKYC verification saves you from the hassle of going through the KYC verification process every time you want to avail financial services.
The 14 digit cKYC number is assigned to you when you submit the required documents. This cKYC number can be used by financial institutions to verify the KYC details of its customers through the CERSAI. This makes the document verification process easy.
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