What is the full form of KYC
What is the full form of KYC
KYC: Know Your Customer.
KYC stands for Know Your Customer. It is a process followed by a financial institution or an entity to collect the details to establish the identity of a client.
KYC process was introduced by Reserve Bank of India (RBI) to prevent financial frauds like money laundering, identity theft and illegal transactions.RBI has advised the banks to follow the KYC process while opening the accounts.
It protects the customers from fraudsters who can use their name, address and forged signatures to make fraudulent transactions. So, the customers of financial institutions like banks should provide the authentic details so that the banks could identify their customers and serve them in a better way.
KYC includes the following details:
- Customer Name
- Date of Birth
- Father’s Name
- Mother’s Name
- Marital Status
- Address Proof
- Identity Proof
- Contact No.
- PAN Card
Who Needs KYC?
KYC is a mandatory practice for financial institutions and other related businesses. Companies must comply with the regulations or may face fines or penalties from authorities. The following are some examples of enterprises which need to incorporate KYC
- Banks and their respective subsidiaries
- E-commerce
- Real estate business
- Dealers of precious metals
- Insurance companies
- Casinos and online gaming
- Virtual currency businesses