The KYC procedure is completed by the banks while opening accounts and also banks periodically
update the same.

What documents come under completing KYC procedure?
To open a bank account, one needs to submit a ‘proof of identity and proof of address’ together
with a recent photograph.

Documents giving proof of identity are Passport, Driving Licence, Voter’s Identity Card, PAN Card,
Aadhaar Card issued by UIDAI and NREGA Card which have been notified as ‘Officially Valid
Documents’ by the government.

If the document also contains the address, it is valid as an address proof also, but if not then you need to provide another document as address proof. Like:(i) Telephone bill (ii) Bank account statement (iii) Letter from any recognized public authority (iv) Electricity bill (v) Ration card (vi) Letter from employer (subject to satisfaction of the bank) (vii) A rent agreement indicating the address of the customer duly registered with State Government or similar registration authority.(any one document which provides customer information to the satisfaction of the bank will suffice ).

What is the need of KYC by the banks?
It is a process by which banks obtain information about the identity and address of the
customers. This process helps to ensure that bank’s services are not misused. It helps to stop
money laundering.

What is e-KYC?
e-KYC refers to electronic KYC. e-KYC is possible only for those who have Aadhaar numbers.

Use of e-KYC:

People can register for e-KYC on the basis of their Aadhar Numbers. After the e-KYC procedure is
done, all information of the customer can electronically transfer to the banks. So in this case,
there is no requirement of paper submission of proofs. So e-KYC process is permitted to be
treated as an ‘Officially Valid Document’.

Facts about KYC:
If a person does not have any of the proofs, then also he can get his account open as a
‘small account’.
When someone transfers his bank account from one branch to another branch of the same
bank, there is no need for going to KYC procedure again.
However, if address is changed then the KYC procedure needs to be done again.
In case you do not have a bank account, KYC procedure is also required for getting
credit/prepaid cards, for remittances of Rs. 50,000 and above, for purchasing mutual
fund/insurance products, etc.

These ‘Know Your Customer’ guidelines have been revisited in the context of the Recommendations made by the Financial Action Task Force (FATF) on Anti Money Laundering (AML) standards and on Combating Financing of Terrorism (CFT) /Obligation of banks under Prevention of Money Laundering Act, (PMLA), 2002. 

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