Introduction to Know Your Customer (KYC)
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KYC (Know Your Customer) is a process financial institutions use to verify customer identity and reduce risks. It involves obtaining and periodically updating customer identification and address information. KYC aims to prevent identity theft, financial fraud, money laundering and terrorist financing. Banks must perform KYC at account opening and in other instances such as loans or changes to signatories. KYC documentation includes identity documents like a passport and address proofs. Financial institutions must also monitor customer transactions for consistency with the customer's profile and peer activities.
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July 2016
LIST OF KYC DOCUMENTS
Mandatory Documents
Certificate of Incorporation
Articles of Association (AoA)
Memorandum of Association (MoA)
Service Tax (ST) Certificate / VAT(Value
Added Tax) Certificate
Rent Agreement Copy ( In case if place is
on lease/rent)
KYC of Directors and Authorised Signatory
(PAN Card, Aadhar Card & Passport Copy)
COMPANIES/ BUSINESS ENTITIES
Address Proof (Any 1)
(in the Company name)
Bank Statement [Preferred]
Electricity bill
Telephone bill](https://image.slidesharecdn.com/rupesh-introductiontoknowyourcustomer-161109135047/85/Introduction-to-Know-Your-Customer-KYC-6-320.jpg)
Introduction to Know Your Customer (KYC)
- 1. www.loanXpress.com Introduction to KYC (Know Your Customer)
- 2. 2www.loanXpress.co m July 2016 What is KYC...?? KYC stands for ‘Know Your Customer’ It is a process by which banks obtain information about the identity and address of the customers and helps to ensure that banks’ services are not misused Banks are also required to periodically update their customers’ KYC details It enables banks to know / understand their customers and their financial dealings so as to be able to serve them better. Know your customer (KYC) policy is an important step developed globally to prevent: Identity theft Financial fraud Money laundering and Terrorist financing Customer Asks ‘KYC’ Defining a Customer Individual Company/ Business Entity Professional Intermediaries such as Stock Broker Chartered Accountants, Solicitors etc Any person or entity connected with a financial transaction
- 3. 3www.loanXpress.co m July 2016 Situations When KYC is required…?? • Opening an account in a bank • Applying for a Credit card or Loan • Opening a subsequent account • Opening a Locker facility • While investing in a Mutual fund • Financial institutes may ask for a mandatory KYC process in other instances too • When there are not enough documents with the Bank in existing account • When there are changes in Signatories, Beneficial owners, etc • When the bank feels it necessary to obtain additional information from existing customers based on conduct of the account
- 4. 4www.loanXpress.co m July 2016 What does KYC controls..? Name matching against lists of known parties Collection and analysis of basic identity information (‘Customer Identification Program’ or CIP) Creation of an expectation of a customer’s transactional behavior Determination of the customer’s risk in terms of propensity to commit money laundering, terrorist finance or identity theft Monitoring of a customer’s transactions against their expected behavior and recorded profile as well as that of the customer’s peers
- 5. 5www.loanXpress.co m July 2016 LIST OF KYC DOCUMENTS Documents acceptable as proof of identity/address Passport Voter's Identity Card Driving License Aadhaar Letter/Card NREGA Card PAN Card Any one document towards proof of identity and proof of address (either permanent or current ) INDIVIDUALS Minors If minor is less than 10 years of age, ID proof of the person who will operate the account to be submitted. In cases where minor can operate the account independently, KYC procedure for identification/address verification as in the case of any other individuals would apply. NRI’S Passport and Residence Visa Copies, duly attested by Foreign offices, Notary Public, Indian Embassy
- 6. 6www.loanXpress.co m July 2016 LIST OF KYC DOCUMENTS Mandatory Documents Certificate of Incorporation Articles of Association (AoA) Memorandum of Association (MoA) Service Tax (ST) Certificate / VAT(Value Added Tax) Certificate Rent Agreement Copy ( In case if place is on lease/rent) KYC of Directors and Authorised Signatory (PAN Card, Aadhar Card & Passport Copy) COMPANIES/ BUSINESS ENTITIES Address Proof (Any 1) (in the Company name) Bank Statement [Preferred] Electricity bill Telephone bill
- 7. 7www.loanXpress.co m July 2016 Terminologies to know • Money laundering Is the process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, originated from a legitimate source • Terrorism financing Refers to activities that provides financing or financial support to individual terrorists or terrorist groups A government that maintains a list of terrorist organizations normally will also pass laws to prevent money laundering being used to finance those organizations
- 8. 8www.loanXpress.co m July 2016 We would love to assist you Get in Touch Corporate Office: Vermillion Finalytics Private Limited 4D, Siddhivinayak Chambers, Gandhi Nagar, Opp MIG Cricket Club, Bandra (E), Mumbai – 400 051 Telephone : (022) – 2655 8760 Tollfree : 1800 – 228 - 005 Email : info@LoanXpress.com Website : www.LoanXpress.com