What are the Documents Required for KYC?

KYC, or ‘know your customer,’ is a mandatory verification procedure by financial institutions to minimize illegal activities. Since 2004, the Reserve Bank of India has prohibited individuals from opening a bank account, trading account, or demat account without fulfilling the KYC procedure for KYC. For any kind of financial transaction, you need to go through the KYC process. Once the KYC verification process is done, you must give the financial institution conducting the test information about your identity, address, and financial history. This can aid the bank in knowing that the money you chose to invest was not for any illegal activities.

So, what are the documents required for KYC? Find out all about it below.

Why Are Documents Required for KYC?

Documents form an essential component of the Know Your Customer (KYC) cycle as the latter validates an individual’s or business’s identity and address. All they are, in essence, is a way of proving that the person opening a bank account, taking out a loan or investing in a financial product is who they say they are.

Financial institutions in India are required to adhere to KYC norms, which are set up by the Reserve Bank of India for combating issues of fraud and money laundering. The banks and financial service providers obtain documents such as Aadhaar, PAN card, passport, or utility bills to ensure that their services are not misused.

Moreover, proper KYC identity proof documents help build a secure and transparent financial system. It enables organisations to evaluate customer risk, keep quality records, and provide personalized services more confidently. Without the documents being verified, the risk of identity theft, false claims, and illegal activities rises exponentially.

Submitting KYC requirements for mutual funds and other investments is not just a legal formality. They are an essential tool to protect financial institutions and their customers from harm.

List of Documents Required for KYC

The required documents for KYC need to be submitted as hard or scanned copies, depending upon the type of KYC. Two broad sets of documents are required for KYC: proof of identity and proof of address, which can overlap but generally vary. The documents required are as follows:

For Identity Proof

• Aadhaar card
• PAN card 
• Driving license
• Passport
• Voter ID
• Photo ID cards from Central or State government entities, public sector undertakings, and public financial institutions

For Address Proof

• Voter ID card 
• Passport
• Driving license
• Rental agreement
• Utility bills like  electricity bill, water bill, telephone bill or gas bill
• Ration card
• Passbook or bank statement
• Sale deed

Types of KYC verification

There are two types of KYC verification processes. They both are equal in terms of their authenticity and it is a matter of convenience whether one chooses to opt for one type over the other.

Online KYC (e-KYC) 

e-KYC is online verification conducted via the internet. It is effective for people who prefer to do the process via smartphones, tablets, computers, etc. It is good for people who are old, frail, bedridden, handicapped, and unable to move and go to particular places. For e-KYC, applicants must upload scanned copies of their identity and address documents or undergo verification through a video call (Video KYC), where they present their documents for verification.

In-Person based KYC

On the other hand, in-person KYC verification is carried out offline. To do so, you can visit a KYC kiosk or mutual fund house and authenticate your identity using Aadhar biometrics. You can also call the KYC registration agency to send an executive to your home or office to carry out this verification.

How to Submit the Documents for KYC Verification?

You can submit KYC documents for verification through online as well as offline methods:

Online (e-KYC)

• You can apply by visiting the website of the KYC Registration Agency. 
• Then log into it using your mobile number after scanning and uploading all of your documents in the related space of the form. 
• Subsequently, enter the data, accept the terms, and confirm the information by checking the boxes containing your details.

Offline (In-Person KYC)

• Download and fill out the KYC application form, which includes all your details, such as Aadhaar and PAN numbers. 
• Then, visit a KRA office and submit the filled form with your address and identity proof. Sometimes, you may have to go through a biometric verification process.

Conclusion

Understanding what documents are required for KYC can make the verification process a lot easier and convenient. Submitting them is a regulatory requirement. But it is also what makes your financial transactions more trustworthy and transparent.