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Know Your Customer (KYC) in India: An Overview

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Know Your Customer (KYC) is a crucial process in India that ensures financial institutions verify their customers’ identities and validate their documents to prevent money laundering and terrorism funding. In this article, we’ll delve into the various types of KYC processes in India, required documents, and differences between KYC and Anti-Money Laundering (AML).

Types of KYC Processes

Offline eKYC

  • Customers can download an Aadhaar XML file from UIDAI’s portal and share it with Financial Institutions (FIs), along with a share code, for verification purposes.
  • This process is convenient and minimizes the need for physical paperwork.

QR Code

  • FIs can scan the QR code on the back of an Aadhaar card to receive a customer’s information from the UIDAI database for verification.
  • This process ensures that sensitive information remains secure.

cKYC

  • cKYC is a centralized Know Your Customer process that reduces redundancy in KYC compliance by using a customer’s KIN (KYC Identification Number) to access their documents from a central registry.
  • This process streamlines the verification process and minimizes errors.

Video KYC (vKYC)

  • vKYC is an online process where an official representative verifies the customer over a video call, ensuring data safety with end-to-end encryption and minimizing customer onboarding time.
  • This process provides an additional layer of security and ensures that customers are verified in real-time.

Re-KYC

  • Re-KYC is the process of updating a customer’s documents and contact information at regular intervals (every 2 years for high-risk customers, every 8 years for medium-risk customers, and every 10 years for low-risk customers).
  • This process ensures that customer information remains up-to-date and accurate.

Required Documents

The following documents can be used as proof of identity and address:

  • Aadhaar Card
  • Driving License
  • Passport
  • Voter ID
  • Utility bills

Difference between KYC and AML

KYC is a part of the broader Anti-Money Laundering (AML) umbrella, which aims to prevent money laundering and terrorism funding by ensuring customer verification for financial transactions.