KYC stands for Know Your Customer, a process where financial institutions verify the identity of a customer by checking their documents pertaining to proof of identity and proof of address. The Reserve Bank of India instructed all financial institutions to update KYC for various financial products and all digital financial accounts back in the year 2017.
Now a days, every financial institution offering several products require applicants to update their KYC documents for hassle-free services. To explain what is KYC, this is an approach adopted by financial institutions for quick and efficient verification of identity and authenticity of an applicant or customer.
With rapid recognition and acceptance of KYC compliance in financial sectors, an easier and unified verification process has been achieved across India. Below mentioned are some of the financial products where knowing what is KYC and updating it has become extremely important.
- Debit card
Financial institutions require KYC verification for application of fresh debit cards and uninterrupted continuation of existing debit cards.
- Credit card
Credit cards are an essential financial product that offers a revolving line of credit to eligible applicants. One can utilise it as alternate currency, paying for their everyday expenses without using cash. Not updating KYC details can lead to rejection of your credit card application or obstruct your credit process partially or completely.
Updating your KYC details online is easier and is beneficial while availing credit cards like the Bajaj Finserv RBL Bank SuperCard as you will have uninterrupted service and all-time access to funds, all within the credit limit.
Also, non-banking financial companies like Bajaj Finserv help candidates acquire online credit card through their pre-approved offers. These offers are applicable to several financial products and services such as home loans, personal loans, business loans etc. Check your pre-approved offer now by submitting essential details like name and contact number and start the application simply by submitting all KYC details.
- Digital applications
For hassle-free money transfer through mobile applications, update your KYC information in the respective domain.
Since the introduction of KYC in Indian market, there have been multiple theories circulating some of which are true and some are not. Learn these facts and myths about KYC –
- KYC update is a mandatory procedure for all users
Reserve Bank of India has made it mandatory for financial institutions and NBFCs to verify the KYC documents of each client to reduce fraudulent cases. For instance, applicants not having KYC compliance is one of the reasons why credit card application can be rejected.
- KYC prevents money laundering
Updating Know Your Customer form with valid data that will be verified later by financial institutions or credit card lenders help in preventing money laundering. Companies and financial institutions get complete idea about the candidate profile, and hence it reduces the potential risk involving credit card fraud and teaches how you can avoid them.
- Vulnerable personal data
It is a myth that financial institutions or service providers that ask for KYC documents can utilise your data for research, information, sale, or any other purpose. If you know what is KYC then you must know that this is solely for verification of identity and no data can be shared without your permission.
- It is based only on details provided
KYC data is verified through advanced techniques such as facial recognition, biometric information like fingerprint and retina scan, etc. The identity of a person is verified with these mentioned processes as well through documents like Aadhaar card, PAN card, etc. Therefore, not providing valid KYC documents while availing credits can prove to be a main reason why your application got declined as the financial institutions likely failed to verify all the necessary credentials.
Which documents can be presented as KYC documents?
- Aadhaar card
- Voter ID
- Driving license
- PAN card
Consequently, updating your KYC details is mandatory while availing a financial product like online credit card or debit card. Therefore, it is important for users to be well informed about the intricacies of Know Your Customer compliance. Keep these facts and myths in mind next time you apply for a credit card, debit card, or other such financial products.