Full Form of KYC

What is KYC?

KYC, or Know Your Customer, is a mandatory process implemented by financial institutions in India to verify the identity, address, and other relevant details of their clients. The framework is primarily designed to prevent money laundering, terrorist financing, identity theft, and financial fraud. In India, KYC is governed by the Reserve Bank of India (RBI) under the Prevention of Money Laundering Act (PMLA), 2002. It applies to a wide range of services including opening bank accounts, investing in mutual funds, purchasing insurance policies, trading in stocks, and even obtaining mobile wallet services. Typically, customers must provide officially valid documents (OVDs) such as Aadhaar card, PAN card, voter ID, or passport. With digital advancements, eKYC (electronic KYC) using Aadhaar-based biometric verification has become widely adopted, making the process faster and paperless. The Central KYC (CKYC) registry further allows for a single KYC to be used across multiple financial institutions. The KYC process is conducted at the time of account opening and updated periodically. Failure to comply can result in restrictions on the account. The government has also mandated KYC for prepaid payment instruments and digital lending platforms to ensure a secure financial ecosystem. For students preparing for banking and insurance exams, KYC is a fundamental topic under financial awareness and banking regulations, often appearing in multiple-choice questions related to compliance and anti-money laundering measures.

KYC का फुल फॉर्म

Example

The bank asked me to submit my Aadhaar and PAN cards for KYC verification before opening a new savings account.

KYC — frequently asked questions

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