Once you have understood KYC meaning and its relevance, it is essential for you to be aware about when KYC is required. While KYC is legally binding, completing the KYC/ eKYC process also helps customers gain access to the different premium products offered by the finance company and also get transactions done faster.
KYC For Banks
KYC completion and updates periodically vary from one account to another, based on the bank's perception of risk. Thus, KYC becomes crucial while performing transactions such as opening bank accounts, making investments in fixed deposits, recurring deposits, mutual fund accounts, and online investments.
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KYC become crucial since it helps the banks to ensure that the application received, and all the other details are of a legitimate customer. By ensuring an individual's identity; thus, banks can easily predict and prevent fraud.
KYC For Investments/Life Insurance
KYC information becomes necessary for ensuring that the investments/insurance policy purchases are made by a real person while curbing instances of black money. Hence, the KYC procedure is something that all life insurance and mutual fund investors have to adhere to through a KYC Registration Agency (KRA) as per guidelines laid IRDAI (Insurance Regulatory and Development Authority India) and SEBI (Securities and Exchange Board of India).
KYC is essential for individuals who wish to open a Demat and stock trading account, a bank account, fixed deposit account, purchase life insurance, operate mobile wallets for digital transfer of money and any other financial transactions with a registered body.
Without KYC update, you cannot open or conduct any financial transactions in India.
