Fintech

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August 8, 2022

KYC Form: Meaning, How To Submit & Documents Required

Want to learn about KYC Forms? Click here to know about what is kyc form, its importance, types of kyc form, documents required, who should apply & how to fill a kyc form.

What Is A KYC Form?

To counter prevalent money laundering and fraudulent activities in the financial sector, the RBI introduced KYC in 2002. KYC stands for ‘Know Your Customer’. KYC form is a set of documents used to collect personal customer information. This helps in identifying and authenticating customers by financial institutions such as banks, insurance, and investment companies.

Customers are required to submit KYC forms while signing up for financial services including but not limited to - mutual funds, motor vehicle insurance, term plans, credit cards, fixed deposits, and also while applying for new bank accounts.

Importance of KYC Form

KYC form collects crucial information that helps develop a customer's profile. Information such as Aadhaar number, proof of address, and income proof is noted. This helps financial institutions understand the source of an applicant's income.

Data collected from the KYC form helps observe the customer’s activities. This in turn helps in assessing the risk of money laundering. It also protects creditors from potential losses due to illegal transactions.

While financial institutions curb fraudulent activities, customers get the advantage of accessing a wide spectrum of services offered by these institutions.

Also, governments project a stable investment environment and instill confidence in foreign investors. This is possible because KYC forms help collect data which in turn helps the financial system become incorruptible and trustworthy.

Who Needs To Fill KYC Forms?

Submitting information through KYC forms is compulsory for availing of financial services. Below is the list of entities that are required to fill out KYC forms.

  1. Individuals
  2. Non-resident Indians
  3. Non-Individuals
  4. Sole Proprietor firms
  5. Corporations
  6. HUF
  7. Partnership firms
  8. Trust
  9. Foundations
  10. NGOs
  11. Charitable Bodies
  12. Unincorporated association or a body of individuals
  13. Foreign Institutional Investors (FIIS)

Let’s understand the various types of KYC forms.

Types Of KYC Forms


Once the customer fills in their information and submits it via the KYC form, the data is then stored and maintained centrally with the government. KRAs, also known as KYC Registration Agency, are registered with SEBI under the Securities and Exchange Board of India Regulations, 2011. They are responsible for maintaining the records on behalf of SEBI-registered capital market intermediaries.

There are five KRAs in India. They are NSDL, CAMS, CVL, NSE, and Karvy.

Each KRAs offer its KYC forms which customers can use to submit their information.

How To Fill A KYC Form?

The KYC form can be filled out via three methods - offline, online, and Aadhaar-based biometric authentication.

Offline method

1. Download the KYC form from the official website of the financial institution

2. Fill the form with and mention your Aadhaar and PAN details

3. Visit a KRA offline center and submit the application

4. Attach the identity and address proofs with the KYC form

5. Some centers might need you to submit your biometrics - iris and fingerprint scan

6. After successful submission, an application number will be provided for tracking the status of KYC

Online method

1. Visit any of the five KRA’s or any financial institution's website

2. Enter the details correctly as per your Aadhaar card on the KYC online form

3. Register using the OTP generated on your mobile

4. Apply successfully

5. Once the details are verified by UIDAI, the respective KRA approves the KYC application

6. KYA application status can be checked by visiting the website again 

Aadhaar-based biometric authentication

1. Visit any of the KRA’s official website

2. Follow the steps mentioned above for filling KYC online form

3. Request for biometric authentication

4. An representative from the financial institution visits the home address mentioned in the KYC form

5. Official documents are verified and biometrics taken

6. Application is successfully submitted and the KYC process completed

Documents required for KYC

The following documents are required to complete the KYC process.

Proof of Identity

- UID (Unique Identification Number) linked with Aadhaar / Voter ID/ Driving License (DL) / Passport

- PAN card with photograph

- Identity card or document with applicants photograph; The documents need to be issued only by the Central or state government

- An identity card issued by PSUs (Public Sector Undertakings), SCBs (Scheduled Commercial Banks), or PFIs (Public Financial Institutions)

- Identity card issued by a college that is affiliated with a university or professional bodies such as ICAI, ICWAI, Bar Council, ICSI, etc

- Credit or debit cards issued by a bank

Proof of address

- Bank account passbook (Not more than 12 weeks old)

- Utility bills - landline, electricity, or gas (Not more than 12 weeks old)

- An identity card issued by PSUs (Public Sector Undertakings), SCBs (Scheduled Commercial Banks), or PFIs (Public Financial Institutions)

- Identity card issued by a college that is affiliated with a university or professional bodies such as ICAI, ICWAI, Bar Council, ICSI, etc

- Voter ID card/ Passport/ Driving License (DL)/ Flat Maintenance bill/ Insurance document

- If the applicant is convicted, a self-declaration provided by Hon’ble Supreme court and High court judges granting the applicant a new address

- For Foreign Institutional Investors (FIIs), Power of Attorney given to custodians by FIIs mentioning the registered address

- An address proof in the name of the spouse is acceptable too

Conclusion

Both Individuals and Non-Individuals can complete their KYC process by submitting the KYC form to a KRA or by submitting the KYC online form. This enables financial institutions to service customers better and also manage risks effectively. 

Check out HyperVerge's suite of solutions for KYC verification! 

Frequently Asked Questions (FAQs)

Is KYC required for every bank account an individual holds?

The Reserve Bank of India (RBI) prohibits individuals from opening a bank account, trading, or a Demat account without fulfilling the KYC procedure. So, all bank accounts must be KYC-approved.

What happens if an individual does not complete KYC?

The financial institution is entitled to refuse to open an individual's account or discontinue the existing account if the KYC process is incomplete.

FAQs

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