Complete guide on Central Know Your Customer (CKYC)

Traditionally, KYC or Know Your Customer has been a tedious, time-consuming, and stressful process for the BFSI industry in onboarding customers. However, with the introduction of the Central Know Your Customer (CKYC) registry, the documentation process has now become simpler and quicker for the customer and importantly safer for all.

KYC, replaced by CKYC (Central Know Your Customer), was introduced to curb the illegal, fraudulent activities that abound in the financial sector. It secures financial houses by helping them know the customer easily. It is an initiative by the Government of India that aims to have a structure in place to bring the KYC process of all financial sector entities under a single window.

KYC is managed by CERSAI (Central Registry for Securitization Asset Reconstruction and Security Interest of India). The body is responsible to receive, hold, safeguard and when required retrieve KYC records of customers in digital form.

Customers will now undergo the process of CKYC just once – i.e., either with a Bank, Mutual Fund, or Insurance Company. They won't have to fill up the KYC form all over again while doing business with any other financial entity.

• CKYC is a 14-digit number linked with ID proof
• All documents are stored in a digitally secured electronic format
• The documents submitted are verified with the issuer
• All the concerned institutions will get timely notifications if there are changes in KYC details
• The portal is user-friendly and safe.

When the customer is starting a financial relationship, they would first be asked to submit the required documents and fill out the KYC form. The documents would then be sent to CERSAI. Once the CKYC is completed for the client, they will be allotted a 14-digit unique CKYC identification number.

In future, if the client wishes to invest in another fund house, they will not need to re-submit the documents again. The financial house will request the CERSAI to furnish the documents with the help of the assigned CKYC number.

This way, the process offers several benefits:

• Saves Time and Energy:

Once a customer is registered under CKYC, they won't have to go through the documentation process again.

• Easy Access:

 Clients can update their details in the CKYC registry anytime, without much effort.

• Easy to Follow:

Investors can register easily by following simple steps.

• Safe:

 Eliminates money laundering and other illegal activities in the financial sector.

• Less Burden:

 It's easier for the investment authorities to retrieve a customer's data.

• Convenience:

Clients can buy or invest in various financial schemes – with the help of the CKYC number.

It has become mandatory to complete central KYC before making any new investment. Financial institutions save your KYC records in their database. The CKYC process helps them know their customer better and secure their investment. It also helps curb any fraud and suspicious behaviour in the financial space. 

You must go through CKYC to invest with any fund house. Below are the steps involved in a CKYC process:

• You have to fill out and submit a KYC form along with the required documents. CERSAI, verifies the KYC documents.
• The verified KYC documents are stored digitally on a server, and you are allotted a 14-digit number linked with your ID proof.

Once the CKYC process is complete, you will not be asked for KYC again when you invest with some other fund house as it can request CERSAI to give them your documents by providing your CKYC number. Your data stored with CERSAI is accessible by all the authorised financial entities, which they can use whenever required.

Here's a list of documents required for CKYC registration.

• Valid identity Proof — Aadhar card, PAN, passport, driver's license, voter ID, etc  
• Address Proof — passport, driver's license, etc
• Photograph

Once the data is stored and verified, the financial entity can access the documents with the help of the 14-digit CKYC number that has been assigned to the individual.

There are 4 types of CKYC accounts; we have listed these below.

1. Normal accounts are opened when any of the following 6 official documents are submitted as identity proof:

• PAN,
• Aadhaar,
• Voter ID,
• Driving License,
• Passport and
• NREGA Job Card.

2. Simplified Measures Account

This account is created if the customer submits other officially valid documents (OVDs) that are allowed as per RBI circular RBI/2015-16/42. The KYC identifier for this account is prefixed by 'L'.

This account is opened when only personal details along with a photograph are submitted. The KYC identifier for this account is prefixed with 'S'.

This account is created if the customer submits a photograph along with an Aadhaar PDF file downloaded from the UIDAI website – which is further enabled by an OTP. The KYC identifier for this account is prefixed with 'O'.

3. Small Account

This account is opened when only personal details along with a photograph are submitted. The KYC identifier for this account is prefixed with 'S'.

4. OTP-based eKYC Account

This account is created if the customer submits a photograph along with an Aadhaar PDF file downloaded from the UIDAI website – which is further enabled by an OTP. The KYC identifier for this account is prefixed with 'O'.

An individual can check their CKYC number through any financial services company in these simple steps:

• Log on to the website of the financial services company that offers CKYC checks
• Enter PAN
• Next, enter the security code that's shown on the screen
• The CKYC number will be displayed on the screen.

Customers can save this number for future use. It will save time when investing with any other financial institution.

As of now, existing investors need not undergo the CKYC process. However, this may change in the future.

 A much-needed step, CKYC is a powerful and effective tool to bring more customers/investors into the financial fold, while securing the interest of the customer and the financial sector. Presumably, this will help both sides conduct business efficiently and with comfort and confidence.

The CKYC is valid for a lifetime. You have to go through the CKYC online registration once in your lifetime.CKYC is beneficial for both investors and fund houses. It leads to an easy onboarding process for fund houses and allows for larger market penetration. CKYC makes the financial journey hassle-free and easy for investors.

While CKYC is a mandatory verification procedure done by financial institutions to minimise illegal activities, you can open a new bank account without any KYC.

The RBI has prohibited opening a Bank Account, Demat, or reading account without KYC since 2004. However, you can open a Bank Account without KYC under the following conditions:

• If you open small accounts, which are opened using your signature and self-attested photographs in the presence of a bank official.
• If you are a low-risk customer categorised by your bank and do not need official documents to open a bank account.

Below are the six most widely known KYC types:

• 1. Paper-based KYC – An in-person type of verification where you share physical, self-attested document copies
• 2. Aadhaar-based eKYC – A method that uses Aadhar-verified data to authenticate you remotely. The data collected by the Unique Identification Authority of India (UIDAI) helps in the authentication.
• 3. Offline KYC – Not to be misinterpreted with physical KYC, this method uses an offline form of Aadhaar that does not connect to the UIDAI database
• 4. Digital KYC – Involving the capture of your live photo with geo-tagging of Officially Valid Documents (OVDs) by an authorised officer.
• 5. Central KYC or CKYC – A process that uses a central repository of customer KYC records for use in the BFSI sector.
• 6. Video KYC – An assisted or unassisted KYC done via video involving an agent and an auditor for audit and verification.

You can open a Fixed Deposit or a Recurring Deposit Account, perform financial transactions like RTGS/NEFT, do internal fund transfers and deposit a Demand Draft among other actions using AU Small Finance Bank's AU Video Banking solution. Even non-AU Small Finance Bank customers have access to our Video Banking facility. AU Video Banking facility offers a personalised banking experience.

Our AU Video Banking includes the process of Video KYC. With Video KYC, you can submit your KYC information via video and get your verification done. You can get onboarded securely and in seconds with our AI-based KYC Validation, Personalised Security Questions, and Mobile Number Authentication via OTP.