Understanding Central KYC - Types of CKYC Accounts

We are all familiar with the KYC (know your customer), a procedure used by financial entities to authenticate an individual's identity and address through relevant documents. While there is no denying KYC is a protective measure to combat fraudulent acts, complying with KYC norms repeatedly can be a tad tedious.This is where CKYC(Central Know Your Customer) comes to the rescue. It is a one-time process that dispenses the need to file credentials multiple times for making investments at different financial institutions (FIs).

CKYC is an acronym for "Central Know Your Customer", a centralised repository that will receive, store, safeguard and retrieve (when needed) the KYC records of all customers in the financial sector. The objective of the Central Government is to bring all the KYC records on a unified platform. Legitimate financial organisations can access the data saved electronically in one central server.CKYC compliance enables an individual to interact with various financial entities nationwide without the need to complete KYC formalities repeatedly. The simplified format works well for the customers as well as the financial establishments. The initiative was announced at the Union Budget of 2012-13 but became operational in July 2017. The management and administration of CKYC have been entrusted to the Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI).

As per the directives of the Ministry of Finance, there are 4 Types of CKYC Accounts. These include the following.

1. Normal Account: This type of account is created once you submit any one of the following six official identity proof documents: PAN, Aadhaar, Voter ID, Driving License, Passport, and NREGA Job Card.
2. Simplified/Low-Risk Account: Individuals who are unable to furnish any of the above 6 documents can submit other officially valid documents (OVDs) that are permitted by the RBI circular RBI/2015-16/42.
3. Small Account: The small account is for people without any officially valid papers. It can be opened by submitting personal details along with a photograph.
4. OTP-based eKYC Account: This type of account requires a photograph along with Aadhaar PDF file downloaded from the UIDAI website. To download, you have to submit the OTP received on your registered mobile number.

Registering for CKYC is a straightforward process. You can get in touch with any regulated FI to fill out and submit the CKYC form along with duly attested documents to CERSAI. Also, in-person verification (IPV) has to be done.The process can be accomplished through any regulated FI such as a bank, an insurance company, mutual fund house, NBFC, registrar, stockbroker, etc. as per convenience. NRIs can self-attest and verify the documents and mention the same in the KYC form.

• Filled-in and signed CKYC application form
• PAN Card
• One identity proof ( Passport copy, Driving License, Voter ID, Bank photo Passbook or Aadhaar Card).
• Address proof (latest Mobile, Landline, or Electricity bill, Bank Passbook, Demat Account Statement,Passport copy,Ration card, Voter ID, or Aadhaar card)
• One photograph

Once the registry authenticates your CKYC application and documents, it will store the data safely in digital format. You will be allotted a 14 digit number linked with your ID proof by CERSAI. Intimation regarding it will be sent via SMS/email at the registered mobile number after it is generated. The unique 14-digit number known as KIN (KYC Identification Number) reflects that you are KYC compliant.Thereon you can simply provide your KYC identification number when conducting transactions with financial entities. It will save you the ordeal of completing the tedious process of KYC formalities on multiple occasions. Since the FIs can access your details from the CKYC database, the onboarding procedure will become effortless for both parties involved.

• Log on to the web portal of any authorised financial services that offer CKYC checks.
• Enter your PAN number.
• Punch the security code displayed on the screen.
• Your 14 digit CKYC number allotted by CERSAI will flash on the screen
• Download the CKYC number and save it for future use.

As you can see, the replacement of the old KYC programme with the new Central KYC format is beneficial for both the user and FIs. Alignment with the new regulations will make future transactions across all financial products, not only hassle-free and cost-effective but also quicker and safer.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.