Where are KYC norms applicable?

KYC is required to be done once in every two years for high risk customers, once in every eight years for medium risk customers and once in every ten years for low risk customers. This exercise would involve all formalities normally taken at the time of opening the account.

What are the 3 components of KYC?

The 3 Components of KYC

  • The first pillar of a KYC compliance policy is the customer identification program (CIP).
  • The second pillar of KYC compliance policy is customer due diligence (CDD).
  • The third pillar of KYC policy is continuous monitoring.

What is know your customer KYC norm of the company?

KYC is an acronym for “Know your Customer” a term used for Customer identification process. The objective of the KYC guidelines is to prevent banks being used, intentionally or unintentionally by criminal elements for money laundering.

Which area is responsible for collecting complete and accurate customer information as defined by the Know Your Customer policy for effective screening?

Collecting the required data — a process referred to as customer due diligence (CDD) — is mandatory, and failure to comply can result in regulatory fines, penalties and other consequences.

What documents need KYC norms?

KYC Documents Individuals

  • Passport.
  • Voter’s Identity Card.
  • Driving Licence.
  • Aadhaar Letter/Card.
  • NREGA Card.
  • PAN Card.

What is know your customer process?

KYCC or Know Your Customer’s Customer is a process that identifies a customer’s customer activities and nature. This includes the identification of those people, assessing their associated risk levels and associated activities the customer’s customer (business) is involved in.

What is customer identification procedure?

Customer Identification Procedure ( CIP ) Customer identification means identifying the customer and verifying his/ her identity by using reliable, independent source documents, data or information.

What does know your customer KYC due diligence involve?

KYC helps financial institutions better understand and serve their customers and their unique needs. Inherent within KYC is the notion of customer due diligence (CDD) which usually involves background checks to assess the risk they pose, before dealing with them.

What is KYC identity verification?

Know Your Customer (KYC) verification is the process of ensuring that current or prospective customers are who they claim to be, and aren’t engaging in illicit business through the financial institution. Some countries’ KYC procedures are referred to as a “Customer Identification Program.”

What is KYC (Know Your Customer)?

Know Your Customer (KYC) – Meaning & Overview One of the prime regulators of the banks and financial institutions in India, the RBI, states that “The objective of KYC guidelines is to prevent banks from being used, intentionally or unintentionally by the criminal elements for money laundering or terrorist financing activities.”

What are the new CKYC norms?

After complying with the new CKYC norms, a unified customer identification code is generated, and it will be used whenever KYC will be required. This initiative has been started for the purpose of centralising and streamlining KYC process. Duplication of KYC will be avoided after this, less scope of forgery will be there.

What is the Central KYC registry?

With uniform norms and inter-usability, central KYC registry across all financial sectors has been set up as a depository for KYC records. This new process, without asking customers to provide multiple KYC undertakings will help banks, mutual funds, brokerage firms and depository participants offer services.

What should you look for in KYC due diligence?

In determining what level of due diligence is appropriate, a company should look for red flags relating to: A second component of KYC compliance is the establishment of a Customer Identification Program (CIP) as a part of the onboarding process to “form a reasonable belief that (the business) knows the true identity of each customer.”