KYC Stands for “Know Your Customer”. Know your customer (KYC) policy is an important step developed globally to prevent identity theft, financial fraud, money laundering and terrorist financing. The objective of KYC is to enable banks to know and understand their customers better and help them manage their risks prudently.

KYC is a regulatory and legal requirement and KYC policies are framed by respective banks incorporating the key elements following the Reserve Bank of India’s directive in 2004 such as Customer Acceptance Policy, Customer Identification Procedures, Monitoring of Transactions and Risk management.

The process of KYC entails identifying the customer and verifying the identity by using reliable and independent documents or information while opening different accounts in Bank.

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According to the KYC policy, a “Customer” is-

• A person or entity that maintains an account and/or has a business relationship with the bank
• One on whose behalf the account is maintained (i.e. the beneficial owner)
• Any person or entity connected with a financial transaction which can pose significant reputational or other risks to the bank, say, a wire transfer or issue of a high value demand draft as a single transaction

For Accounts of individuals, the bank will require the following information and documents under KYC

• Identity Proof(any one of the following)
  • Aadhar Card
  • Passport
  • PAN card
  • Voter’s Identity Card
  • Driving license
• Address Proof(any one of the following)
  • Aadhar Card
  • Utility bill
  • Voter’s Identity Card
  • Driving license