Fullerton India Credit Co. Ltd. is Now SMFG India Credit Co. Ltd.

Introduction

Opening a new bank account or investing in a new financial product is incomplete without the proper documentation. In such instances, submitting proof of identity, address, or income can be tedious and time-consuming. To streamline this, an innovative system known as CKYC was introduced to simplify customer identification across different financial institutions.

CKYC, or the Central Know Your Customers, is a centralized database of KYC (Know Your Customer) records on a unified platform. Managed by the Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI), the Central KYC serves to simplify banking and other financial activities in India by reducing the hassles involved in repeatedly providing identification documents.

To know more on CKYC Registry and CKYC Identifier, refer to the material given below:

 CKYC Identifier

What is Central KYC (CKYC)?

The Central KYC is a segment of KYC. Initiated by the government of India in 2017, the CKYC registry gathers data once individuals record their details on the platform. The individual is then assigned a special CKYC number. So, instead of providing the KYC documents again, the applicant must provide this number. This ensures that all banks and financial companies use the same process to check who their customers are, enabling smoother operations across different financial institutions.

Features of CKYC

Here are some noteworthy features of CKYC:

  • The 14-digit CKYC number is assigned immediately after the customer has provided the requisite documents.
  • All customer details are stored in an electronic format.
  • In case of any changes in the KYC information, notifications are sent to all the concerned institutions.
  • It standardized the KYC process across different financial institutions. This ensures uniformity and consistency in identification procedures.
  • Streamlined interoperability among various financial institutions by allowing them to access and verify customers' KYC details.
  • Reduces the need for repeated KYC documentation by allowing customers to provide their CKYC number.
  • Strict compliance with the rules and regulations laid down by the Government.
  • Simplifies the onboarding process for customers by providing a common platform.

Documents required for CKYC

To complete your Central KYC registration, here is a list of the essential documents required:

  • The CKYC application form.
  • Copies of your passport-size photograph.
  • Any identity proof, including a PAN card, passport, voter ID, driver's license, Aadhaar card, NREGA job card, or any other document verified by the central government.
  • Proof of address such as your passport, voter ID, driver’s license, Aadhar card, rental agreement, utility bills with your name on it, etc.
  • Details of your bank account (if applicable).
  • Ensure that you have self-attested copies of the above documents as well.
Must Read: What are the Required KYC Documents for Loan Approval?

How Does it Work?

Completing the central KYC process is essential for a seamless and secure investment experience. This crucial step equips the banking institution with all the pertinent details about the customer's investment preferences. Consequently, this enables personalised services tailored to the individual's needs. Beyond that, it safeguards against fraudulent activities and dubious conduct in the financial sector, thereby safeguarding investments.

The process is simple and hassle-free:

  • Customers must fill out the KYC form and submit it with supporting documents.
  • CERSAI will further validate these documents, and once validated, they will be securely stored digitally on a unified server.
  • A unique 14-digit number linked to the customer's ID proof is provided for KYC verification, making the process even more secure and convenient.

Once the KYC verification process is completed, customers will not have to repeat it if they invest in different funds. Moreover, this data can be accessed by all authorised financial institutions, enabling them to utilise it as necessary for a more transparent and seamless investment experience. Therefore, it is highly advisable to complete the central KYC process before making any investments and reaping its advantages.

How is CKYC beneficial?

The CKYC has numerous benefits that can significantly simplify and streamline financial institutions' Know Your Customer (KYC) compliance process.

  • By filling out a single form, customers can avoid the hassle of submitting multiple documents.
  • By consolidating KYC records from various entities, financial institutions can save time and money.
  • Additionally, CKYC provides secure access to a centralized customer information database, making it easier for financial institutions to comply with regulatory requirements.
  • Offers a more efficient and cost-effective way to onboard customers while minimizing customer inconvenience.

How are KYC, eKYC and CKYC different?

Aspect

KYC

CKYC

eKYC

Process

Manual with the requirement of physical documents.

One-time verification by CERSAI.

Online procedure.

Purpose

Prevent malicious financial activities and adhere to set regulations by the RBI.

To avoid repetitive KYC processes by various financial institutions and provide a unified platform for records, improving the customer experience.

To provide an online platform for easier documentation.

Associated Entities

Financial Institutions

IRDA (Insurance Regulatory and Development Authority), RBI (Reserve Bank of India), SEBI (Securities and Exchange Board of India), and PFRDA (Pension Fund Regulatory and Development Authority).

Financial Institutions

Verification Process

Involves physical presence.

Verification of application form and documents by CERSAI.

Relies on One-Time-Password authentication, or biometrics.

Required Documents

KYC application form, proof of address, identity, passport-sized photograph and additional documents.

Proof of address, identity, passport-sized photograph and CKYC application form.

Aadhar Card

Must Read: What is eKYC? Meaning, Documentation, Process, Verification

Process of Completing your CKYC Registration

The CKYC registration process involves the following steps:

  • Individuals and entities must undergo Know Your Customer (KYC) compliance at banks, mutual funds, and insurance companies to access financial services.
  • This involves submitting necessary documents, like an Aadhaar and passport, for verification. The documents are then verified physically or electronically through UIDAI for Aadhaar validation.
  • Once the verification process is complete, the institutions upload the verified KYC data to the Central KYC Registry (CKYCR), managed by CERSAI.
  • This creates a unique 14-digit CKYC number referencing the customer's information in the central repository.
  • The CKYC number is used across all Indian financial institutions, eliminating the need for repetitive KYC processes.
  • Authorized personnel can also quickly access and update the customer's KYC status using this number.
  • CKYC ensures regulatory compliance by following RBI and other essential KYC norms, reducing fraud risks. It employs stringent data protection measures that help safeguard customer information within CKYCR, accessible solely to authorized personnel with customer consent.

How do I check my CKYC number online?

Different financial institutions may have different ways of indicating your current CKYC status. However, you can use these simple steps to begin with your central KYC registry check as a general guideline:

  • Go to the official website where you have submitted your KYC details. This can even include your concerned financial institution.
  • Select the ‘Services’ or KYC’ section on the homepage.
  • Provide your PAN details, user ID and password to sign into your account.
  • Go to the section indicating ‘KYC Details’ or similar.
  • The current CKYC status will be shown on the screen.

Conclusion

CKYC has indeed streamlined customer identification and interaction with various financial entities. It is a revolutionary step towards minimising repetitive paperwork, ensuring regulatory compliance, and enhancing data security. This underscores its significance in boosting transparency and convenience within the financial landscape.

FAQs

How long is CKYC valid?

The CKYC holds lifetime validity. However, you can update it at your convenience.

Is CKYC mandatory for bank accounts?

Currently, having a CKYC is a mandatory requirement for bank accounts. But if you are opening a small account or the financial institution considers you a low-risk customer, you can open one with minimal documentation and need not complete the KYC.

Can a bank freeze an account if KYC is not done?

Although banks cannot freeze your account in such cases, they can request that you update your KYC periodically. It serves the account holder's best interest to update their KYC to avoid fraudulent activities. The RBI has warned against fake messages asking for bank details for KYC updates, advising the public to be cautious.

How is CKYC beneficial to me?

The CKYC offers a variety of benefits, including,

  • Simplification of the KYC process by enabling faster onboarding and proper vetting system.
  • Providing a centralised platform for KYC records.
  • Helping financial institutions verify your identity and prevent financial crime.

Which entities can register customers for CKYC?

The eligible entities include:

  • Banks;
  • Insurance companies, mutual funds, securities market intermediaries (like brokers), and non-banking financial companies (NBFCs).
  • Authorised government entities;
  • SEBI (Securities and Exchange Board of India), the RBI (Reserve Bank of India), IRDA (Insurance Regulatory and Development Authority), and PFRDA (Pension Fund Regulatory and Development Authority).
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