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The Reserve Bank of India made the Know Your Customer (KYC) process mandatory in 2002 for the customers before they begin their investing journey. All the banks had to be KYC-compliant by December 31, 2005. According to the Prevention of Money Laundering Act, 2002, and the Securities Exchange Board of India-KYC Registration Agency (SEBI-KRA) Rules, 2011, it is compulsory for all market participants to follow the KYC guidelines. The main aim of KYC was curbing illegal activities such as money laundering, terror funding, bribery, and other corrupt means of accumulating money.
Complying with KYC guidelines is mandatory if you want to avail financial services or invest in various financial instruments. Being KYC compliant means that the financial house has access to all your personal information and that enables them to not only verify your credentials but also monitor your transaction trail.
For any financial transactions, opening a new bank account or applying for a credit card, KYC details are necessary. Similarly, if you are interested in stock markets, mutual funds investments, or want a new sim card for your mobile, KYC compliance is important. Unless you are KYC compliant, you also won’t be able to make any changes in the names of your beneficiaries.
Implementing KYC status online processes offers numerous advantages for businesses, particularly in the financial sector.
KYC establishes trust between businesses and customers by verifying identities and ensuring that transactions are legitimate. This transparency promotes customer confidence, which is crucial for building long-term relationships and enhancing the institution’s reputation.
KYC status online is instrumental in identifying and mitigating risks associated with financial transactions. By screening customers and monitoring their activities, businesses can detect and prevent fraudulent behaviours, money laundering, and other financial crimes. This proactive approach to risk management is essential for maintaining the integrity of financial systems.
Compliance with KYC regulations is mandatory for financial institutions to avoid legal penalties. By adhering to these regulations, businesses not only protect themselves from potential fines but also contribute to the broader fight against financial crimes, thereby supporting a safer economic environment.
Effective KYC processes streamline customer onboarding and ongoing management, leading to improved operational efficiency. Automating KYC procedures can reduce manual workloads, minimize errors, and expedite customer verification, ultimately enhancing the overall customer experience.
KYC status online is vital for building trust, managing risks, ensuring regulatory adherence, and improving operational efficiency in today’s digital economy.
Know Your Customer Registration Agencies (KRA’s) are registered with the SEBI and maintain a central database regarding all information of investors which can be availed by various intermediaries firms.
There are five KRAs in the country:
Once you are KYC compliant with an intermediary, your data is stored in the central database, and you can continue making financial transactions.
Checking KYC compliance online is simple. All you need to do is go to the website of any KRA and provide your PAN details. In the case you are not found to be KYC compliant, follow the steps as below:
First, you need to download the KYC form and fill out the requisite details. Thereafter, provide your ID and residence proof for which you need to submit documents such as a copy of your PAN card, Aadhar card, passport, driving license, Voter ID, or bank passbook, having your photograph.
For proof of address, you can provide documents, like recent electricity bill, rent agreement, landline bill etc along with your passport size photographs. The filled-up form along with the documents should be submitted to the relevant authorities.
If you are interested in mutual fund investment, an authorized person from the fund house will visit your house, collect your Aadhaar card, and map your biometrics such as fingerprints. Your KYC will be validated by matching the fingerprints with the Aadhaar database.
However, Aadhaar-based compliance only allows for annual transactions, which are less than Rs 50,000. To remove this ceiling on investments, you can opt for the In-Person Verification (IPV) through a video call facility to verify your identity and address proof.
Online KYC compliance can also be done via the websites of any KYC Registration Agency (KRA). Thereafter, create your account and provide your personal details. Then you need to enter your Aadhaar number along with the registered phone number. Your information will then be verified through an OTP.
Finally, you will be required to upload a self-attested copy of your Aadhaar card. Post completion, your request will be processed.
After the submission of the KYC form online, the status can be checked online at the KRA’s website by entering your PAN card details. All the information about the existing status of your KYC compliance application would appear. If your KYC is not verified, the status will show as pending. Otherwise, the KYC verification status will appear as ‘Verified by NDML. Additionally, many trading apps also allow you to check the status of your KYC directly within the app, providing a convenient and centralized way to manage your investments.
Thus, being KYC compliant is a mandatory requirement before starting your investment journey. As an investor, you can avail multiple benefits, like convenient and digitally secure transactions. However, choosing a trusted and reliable financial partner is necessary before making investments. IIFL can be your trusted partner to provide you with the best Demat account and other financial services along with a gamut of individually tailored investment plans to help realize your investment goals.
KYC status online refers to the verification level of a customer’s identity in the KYC process. It indicates whether the KYC is validated, under process, on hold, or rejected, helping institutions assess the legitimacy of their clients and comply with regulations.
To check your Aadhaar eKYC status online, visit the official UIDAI website. Navigate to the eKYC section, enter your Aadhaar number, and follow the prompts. You may also need to verify via an OTP sent to your registered mobile number.
You can check your UAN KYC status online by visiting the EPFO member portal. Log in with your UAN, go to the KYC section, and view the status of your KYC documents submitted for verification.
To check the KYC status online of your EPF account, log in to the EPFO member portal using your UAN. Navigate to the KYC section to view the status of your submitted KYC documents.
Bank account KYC status online indicates whether your identity verification with the bank has been completed. It can be “KYC Registered,” “Under Process,” “On-Hold,” or “Rejected,” reflecting the current state of your KYC compliance.
To verify your KYC verification, visit the website of the KYC Registration Agency (KRA) where your KYC is registered. Enter your PAN and captcha to check the current KYC status online.
Check KYC status, and if your bank KYC is not updated, you may face restrictions on account operations, such as withdrawal limits or account freezing. Non-compliance can also lead to penalties for the bank, as it violates regulatory requirements.
KYC, or Know Your Customer, is a mandatory process in banking for verifying customers’ identity. KYC status online aims to prevent fraud or money laundering by ensuring that banks know their clients and their financial activities.
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