The Central Know Your Customer Registry (CKYC) helps financial institutions skip the lengthy process of on boarding customers by making all relevant information abut potential customers available in one place. Find out more.
Opening a bank account is nothing short of an ordeal-from running around gathering documents that date to your school to ensuring that they meet the individual bank’s guidelines in terms of the order, signatures etc.–it can be quite long drawn-out and frustrating! By the time you’ve managed to successfully open one, you’ve resolved to never open another again in the foreseeable future. This is where the CKYC comes to your rescue. CKYC works for both financial institutions and individuals. On the one hand, it helps you skip the hassle of producing your KYC documents every time you’re starting a relationship with a financial institution and on the other, it helps remove the friction several banks face while on boarding customers through KYC verification.
What Is It?
The CKYC is a centralised repository of KYC records of customers availing various services of the financial sector. Records maintained in the repository have uniform KYC norms and can be used across the sector. It was created with the intent to reduce the burden of producing KYC documents and getting those verified every time the customer creates a new relationship with a financial entity. The CKYC is managed by CERSAI (Central Registry of Securitization Asset Reconstruction and Security Interest of India).
Additional Reading: How To Protect Your Money From Digital Banking Frauds
What is the difference between KYC, eKYC and CKYC?
KYC – is the known and regular process in the Mutual Fund industry whereby the identity of an investor is verified based on written details submitted by him / her on a form, supplemented by an In Person Verification (IPV) process. Once the verification is done successfully, the relevant investor data is entered into the KRA Registration Agency (KRA) system and subsequently uploaded to their database.
eKYC – is KYC done with the help of a investor’s Aadhaar number. While completing the eKYC, the authentication of the investor’s identity can be done:
(a) Via One Time Password (Limits investments to Rs 50,000 per year per mutual funds and mandates investments via the online electronic mode)
(b) Via Biometrics (No limits on the investment amount here unless those specifically imposed by the scheme / Fund House)
This data is uploaded into the records of the KRA.
CKYC – is an initiative of the Government of India where the aim is to have a structure in place which allows investors to do their KYC only once. CKYC compliance will allow an investor to transact / deal with all entities governed / regulated by Government of India / Regulator (RBI, SEBI, IRDA and PFRDA) without the need to complete multiple KYC formalities which is an inconvenience / hindrance as of now. It will allow for larger market participation by investors, easing their journey on the financial highway. The CKYC processing is handled by CERSAI.
Additional Reading: Incredible Facts About CERSAI You Probably Didn’t Know
Features Of CKYC
- CKYC is a 14-digit number linked with your ID proof.
- Your data is safely stored in an electronic format.
- The documents submitted are verified with the issuer.
- All the concerned institutions are notified when there are changes in KYC details.
How Does CKYC Work?
Before you start investing in stocks or Mutual Funds, you have to undergo the mandatory process of KYC. Before you start investing with a fund house, you will be asked to fill out the KYC form and submit the relevant documents. These documents will then be sent to CERSAI for verification post which, you will be allotted a 14-digit CKYC number.
After this when you approach another fund house for investment, you will no longer need to submit these documents all over again for verification. The mutual fund house would request CERSAI to furnish your documents by submitting your CKYC number.
Additional Reading: All About Aadhaar Paperless Offline E-KYC
What Documents Would You Need to Complete CKYC formalities?
You need to submit the following documents:
a) Duly filled and signed CKYC application form OR KRA application form + Supplementary CKYC form
b) One proof of Identity (self-attested copy)
c) One proof of Address (self-attested copy)
d) One photograph
How To Check Your CKYC Number
You can check your CKYC number through various financial services company by following these steps:
- Log on to the website of any financial services company offering CKYC check.
- Enter your PAN.
- Enter the security code displayed.
- Your CKYC number would be displayed.
What is ‘KYC Identification Number’?
KYC Identification Number (KIN) is a 14-digit number allotted by CERSAI to an investor who has completed his / her CKYC formalities. This number should be mentioned each time the CKYC details are required to be accessed by any intermediary.
Additional Reading: Aadhaar Based e-KYC: All You Need To Know
Types of CKYC Accounts
Essentially, there are 4 types of CKYC accounts:
- Normal Account: A Normal Account is created when you submit any of the following six official documents as proof of identity: PAN, Aadhaar, Voter ID, Driving License, Passport, and NREGA Job Card.
- Simplified Measures Account: This type of CKYC account is created if you submit other officially valid documents (OVDs) that are allowed as per RBI circular RBI/2015-16/42. The KYC identifier for these accounts will be prefixed by an ‘L’.
- Small Account: This type of account is opened when you submit only personal details along with a photograph. The KYC identifier for these accounts would be prefixed with an ‘S’.
- OTP Based eKYC Account: This type of account is opened if you submit a photograph along with Aadhaar PDF file downloaded from the UIDAI website, which is enabled by an OTP. The KYC identifier for these accounts would be prefixed with an ‘O’.
The benefits of CKYC are multiple starting from how they enable quick and easy access for financial entities to documents they would need while on boarding a customer to doing away with the tiring process of uploading KYC documents for customers every time they want to start a banking relationship. Moreover, you can update your KYC details in the registry whenever you want and can use this singular CKYC number when buying an insurance policy, investing in Mutual Funds or stocks.
If you’re looking for a one-stop shop for all your financial needs, click the link below to start exploring!