Are you frustrated with the repetitive process of providing KYC documents whenever you initiate a new financial transaction? CKYC, an innovative endeavor spearheaded by the Indian government, addresses this recurring inconvenience effectively.
What is CKYC?
CKYC, standing for Central Know Your Customer, serves as a comprehensive repository consolidating KYC information from various financial institutions. It was developed to streamline the KYC documentation process, alleviating the burden on individuals when establishing new financial relationships. Upon successful completion of the CKYC process, individuals are issued a distinctive 14-digit CKYC number. This unique identifier eliminates the necessity of physically submitting documents for subsequent financial transactions with participating institutions. CKYC aims to enhance efficiency and convenience in the financial sector by centralizing KYC information and minimizing the repetitive submission of documents for verification.
History of CKYC
Under Section 73 of the Prevention of Money Laundering Act, 2002, the Central Government possesses the mandate to devise strategies and regulations aimed at combating illicit financial activities.
Leveraging this jurisdiction, the Central Government established the Central Know Your Customer (CKYC) framework to streamline the Know Your Customer (KYC) process for individuals seeking to engage in financial transactions or investments.
The administration of the CKYC registry is overseen by the Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI), ensuring a unified approach to verifying customer identities and deterring the proliferation of black money.
What are the Features of CKYC?
- CKYC, characterized by a unique 14-digit number linked to ID proof, modernizes customer verification in financial transactions.
- Customer data is securely stored electronically, ensuring reliability.
- Documents submitted undergo thorough document verification with issuing authorities.
- Automatic notifications are triggered to all relevant institutions in case of any KYC detail changes.
Understanding how CKYC works
Understanding how CKYC operates is crucial, especially for individuals involved in stock market or mutual fund investments. Here's a simplified breakdown:
When you decide to invest in a mutual fund -
- The first step involves filling out a KYC form and submitting necessary documents at the fund house.
- These documents are then forwarded to CERSAI, where they undergo verification.
- Subsequently, you are assigned a unique 14-digit CKYC number.
The beauty of CKYC lies in its efficiency. Once you possess a CKYC number, investing in additional mutual fund houses becomes a breeze. There's no need to go through the tedious process of submitting documents again. Instead, the new fund house simply requests your verified details from CERSAI by providing your CKYC number.
To know more about the difference between the KYC, CKYC, and eKYC, check our blog.
Which Institutions are Eligible to Enroll Customers for CKYC?
To initiate the CKYC process, you'll need to engage with financial institutions authorized by SEBI, RBI, IRDAI, and PFRDA. These institutions include banks, insurance companies, mutual funds, and others registered with CKYC. Whether you're opening a bank account, a Demat account, purchasing insurance, or investing in mutual funds, these institutions will assist in registering your KYC details with CKYC.
How to Complete the CKYC Process?
In order to complete the CKYC process, Here are the following steps:
1. Find a participating financial institution: Look for banks, insurance companies, mutual funds, or other registered financial institutions that facilitate CKYC registration.
2. Submit your documents: Provide necessary documents such as your PAN card, Aadhaar card, and proof of address as per the requirements.
3. Verification process: The financial institution will conduct a thorough verification of your submitted documents with the issuing authorities.
4. Receive your CKYC number: Upon successful verification, you'll be issued a unique 14-digit CKYC number, streamlining your future financial transactions.
This process ensures compliance with regulatory standards while offering convenience and efficiency in managing your financial affairs.
Steps To Check CKYC Number
To access your CKYC number, you can utilize the services offered by certain financial institutions. Follow these steps:
- Navigate to the official website of a participating financial services provider, such as www.karvykra.com. Currently, only Karvy and CDSL offer the CKYC Check Facility.
- Input your PAN number as prompted.
- Enter the CAPTCHA/security code provided.
- Your CKYC number along with relevant details will be displayed. Take a moment to review the information, and if available, download your CKYC report for reference.
What are the Documents required for CKYC Registration?
- Proof of Identity (POI)
- Proof of Address (POA)
- Passport-size photograph
- Signature
Types of CKYC Accounts
There exist four distinct categories of CKYC accounts, outlined as follows:
- Standard Account: Standard accounts are initiated upon submission of any of the following six official documents for identity verification: PAN card, Aadhaar card, Voter ID, Driving License, Passport, or NREGA Job Card.
- Simplified Measures Account: This variant of CKYC account is established when applicants present officially valid documents (OVDs) permitted under the RBI circular RBI/2015-16/42. The KYC identifier for these accounts is prefixed by 'L'.
- Basic Account: Basic accounts are activated when individuals furnish personal details along with a photograph. The KYC identifier for these accounts is prefixed with 'S'.
- OTP Based eKYC Account: This category of account is initiated when applicants provide a photograph along with the Aadhaar PDF file downloaded from the UIDAI website, facilitated by an OTP. The KYC identifier for these accounts is prefixed with 'O'.
Each type of CKYC account serves distinct purposes and entails specific documentation requirements to meet varying levels of KYC compliance.
Advantages of Central KYC Registry:
- Simplified Verification Process: The CKYC registry streamlines document verification procedures for financial institutions, facilitating smoother operations.
- Elimination of Redundant Document Submission: Investors are spared from the hassle of repeatedly submitting KYC documents when establishing new financial relationships with different companies.
- Enhanced Accessibility for Investors: CKYC empowers investors with the ability to update their personal details within the registry, ensuring accuracy and completeness of information.
- Universal Identification: The CKYC number serves as a universal identifier, enabling investors to seamlessly engage in various financial activities such as purchasing insurance policies, investing in mutual funds, and participating in stock markets.
By leveraging the Central KYC Registry, both financial institutions and investors alike benefit from increased efficiency, convenience, and regulatory compliance.
