4. Meaning
• KYC means know your customer.
• It is the process of business identifying and
verifying the identity of client.
• This process helps to insure that banks service are
not issues.
• The KYC procedure is to be completed by the bank
while opening an account.
• It is also required to periodically update their
customer’s KYC details.
5. Guideline of KYC
• To be aware of the identity of the customer.
• To be aware of the location of the customer.
• To prevent the banking system from being used by
anti-social/criminals/terrorist elements.
• To manage the risk associated with the customer
in the prudent manner.
Guidelines of KYC
7. • No anonymous account.
• Appropriate due diligence.
• Necessary checks to identify any criminal activities.
• Confidential customer profile for new customer.
Customer Acceptance Policy
8. Customer Identification Procedures
• Understand and predict the pattern of
transactions.
• Gauge risks associated to the account.
• Determine the threshold limit beyond which
the transactions need to be checked for money
laundering.
9. Risk Management
• Judge the risk profile of the account
• Categorize the same into proper risk classes
• Introduce a proper system of monitoring so as to
avoid the occurrence of money laundering through
the account held with bank.
Monitoring Of Transaction
• Low risk customers (Rs.5 lakh)
• Medium risk customers (Rs.10 lakh)
• High risk customers (Rs.25 lakh)
10. E-KYC (2013)
• The process of KYC is done through the means of
electronic device is known as e-KYC.
• E-KYC service is provided by unique identification
authority of India (UIDAI)
• Device like mobile , computer, etc. which is
compatible with internet.
• It is paperless and less time required to get done.
• Less risk of loss of information.
11. C-KYC
• It means centralized know your customer.
• It has the inter-usability of the KYC record across
the sector.
• Mainly it is used in financial sector like in
investment , mutual funds etc. and reduce the
burden of producing KYC document and getting
every time verified same information.
