With the growing fraudulence in the financial sector, and to trace any suspicious behaviour it has become very important to keep proper records of customer. CKYC norms were introduced to curb the illegal activity that ruins the financial sector. This helps in knowing the customer better. This further helps in keeping the investment secured.
KYC, replaced by CKYC (Central Know Your Customer). The earlier KYC norms had a separate KYC format for different institutions. However, with the introduction of CKYC, the customer need not go through the KYC process again with any other institution.
Complete Central KYC once done exempts you from going through the whole process again with another institution. This has reduce the burden of the investor from going through the KYC process all over again
CKYC is the abbreviation for Central Know Your Customer. It is a centralised repository that stores or saves all the personal details of the customer. Earlier, there was a separate KYC process for every financial entities. The Central Government launched CKYC. This helps to bring all the KYC processes on a single platform.
Hence, if verification of an investor’s complete Central KYC is done, he is not needed to go through the same process again. In case he desires to invest in some other financial institute. The data is thereafter stored digitally in one central server. This data is accessible to all authorized financial entities. The financial institution can use the data as required.
The Central Registry of Securitisation and Asset Reconstruction and Securities Interest of India (CERSAI) manages CKYC Registry. The Union Budget of 2012-13 announced the CKYC. And subsequently, thereafter it commenced in July 2016.
Central KYC or CKYC is an initiative by the Government to bring the KYC process of all financial entities under a single window. CKYC norm requires all individual investors are to fulfil KYC requirements.
CKYC registry helps the financial entities skip the lengthy process of onboarding customers. They make all the relevant information about the customer available under the same window. This further helps in saving a lot of time and labour.
Before the introduction of CKYC, opening a bank account was an ordeal. One had to run around to gather documents as per the requirement of the financial institute. This took a lot of time and energy. However, if you want to invest in some other financial institute, you have to again go through the same process of documentation.
Therefore, with the introduction of CKYC, the customer need not go through the same pain of documentation. The data is stored under one roof. This data is further available for the authorized financial organisations to have access to it. This helps both the customer and the financial institute skip the hassle of documentation.
The following are the features of CKYC :
It has now become mandatory to complete central KYC before you make any investment. This helps in knowing the customer better and further securing the investment. The financial institution saves the KYC records of customers. This further helps in curbing any fraud and suspicious behaviour in the financial sector.
Prior to the investment with any fund house, the customer has to fill the KYC form. The CKYC form needs to be filled and submitted with related documents. CERSAI further verifies the KYC documents.
The KYC documents verified by CERSAI is stored digitally in one server. The customer is allotted a 14 digit number which is linked with his ID proof. This number will be the KYC verified number.
Once the process is complete, the customer will not be asked for KYC again if he wishes to invest with some other fund house.
The Fund House can request CERSAI to make available the customer’s documents by furnishing the CKYC number. The data so stored is accessible to all authorized financial entities. The financial institution can use the data as required.
CKYC or Central Know your customer was introduced as per the directives of the Ministry of Finance. There are four types of CKYC accounts such as :
1. Normal Account: The account so created depends on the kind of document a customer submits. A normal account is created when any of the below-listed documents are produced by the customer as proof of identity. These documents are :
2. Simplified Measured Account: This is another type of CKYC account. This account is created when the customer submits other valid documents (OVD). These documents are as per RBI Circular RBI/2015-16/42. These accounts are prefixed as ‘L’ by the KYC identifier.
3. Small Account: A small account is created if the customer submits only his personal details along with a photograph. These accounts are prefixed as ‘S’ by the KYC identifier.
4. OTP Based eKYC Account: OTP based KYC is done online. This account can be created by submitting a photograph along with an Aadhaar card PDF file downloaded from the UIDAI website. These are then enabled by an OTP. These accounts are prefixed as ‘O’ by the KYC identifier.
CKYC is not a lengthy process. All you need to do is submit the KYC documents required duly filled and attested. CERSAI verifies all documents once submitted.
The documents once verified by CERSAI will then be stored digitally in one server. The customer is then allotted a 14 digit number linked with his ID proof. This number will be the KYC compliant verified number.
Below is the list of the KYC documents required for registration in CKYC:-
Post verification of these documents by CERSAI a 14 digit number is linked with the ID proof. This number is the CKYC verified number. All the data is stored digitally and the fund houses will have access to these documents by producing the verified number. The customer does not need to go through the CKYC process again if he wishes to invest in some other financial institute.
Verification once complete, the customer can check his CKYC number through any financial services institute. Following these few simple steps :
The customer can note down his CKYC number for future use. This will enable him to save time when investing with any financial institute.
Central KYC or CKYC has multiple benefits. From saving time to easy accessibility it covers it all. To make investing easier and hassle-free, CKYC was introduced in February 2017. Investors Clients will have to complete the CKYC process once either with a bank, mutual fund or insurance company. They will not have to revisit the process of KYC again when investing with any other financial institute.
CKYC is a one time process. It is an easy process and saves a lot of time for the investors as well as the financial institute. The following are the benefits of CKYC:-
Know Your Customer (KYC) is a regular process followed by all financial institutions. KYC is done to Identify an investor. Through this process, the identity of an investor is verified. The investor has to fill in the details on a form provided by the financial institution. The investor submits the filed form. This process is further supplemented by an In-Person Verification (IPV). Once the verification is complete the relevant investor data is stored with the KRA Registration Agency (KRA).
eKYC or Electronic KYC is a regular process. In eKYC, verification is done with the help of an investor’s Aadhaar Card number. While completing the process of eKYC, the authentication of the investor’s identity can be done:
(a) Via One Time Password. (Limits investments to Rs 50,000 per year per mutual funds and mandates investments via the online electronic mode)
(b) Via Biometrics (No limits on the investment amount here unless those specifically imposed by the scheme / Fund House)
KRA then uploads the data digitally in its record.
CKYC is an initiative of the Government of India. It was launched in February 2017. CKYC is done in order to help investors to do their KYC only once while investing. It enables an investor to invest with any other fund house without going through the KYC process again.
CERSAI manages the CKYC process.. It allows investors to transact with all entities which are governed or regulated by the Government of India. The investor is free to transact with any RBI, SEBI, IRDA and PFRDA registered company without the need to complete multiple KYC formalities. This leads to an easy onboarding process. It allows for larger market participation by investors, whereby making their financial journey easy and hassle-free.
You can update the CKYC status online. To update your CKYC you have to follow the below-listed steps :
Presently, there are five KRAs. These agencies are responsible for doing your KYC and storing your records. These agencies are –
You can check CKYC KYC status online by visiting any KRA websites.
CKYC helps an investor to invest in Mutual Funds, or to purchase any financial product. A KYC identification number is provided. The number is then linked with the customer’s ID proof. The investor can use this number to invest in mutual funds.
CKYC verification once done, there is no requirement for the investor to go through the same process again while dealing with some other fund house.
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