There are times when the customers in various banks feel insecure about their money or they are ignored when they visit the banks. These things have continuously kept haunting people and they are yet to get any results on this. There have been so many changes where RBI asked the banks to take strict actions on increasing problems, be it the offline issues or the online critics.
- Now before getting into the deeper roots, one should get to know a bit about KYC and the rules.
- KYC is the process of knowing your customer better, where you on a regular basis update the things with the bank.
- It helps in establishing the customer’s identity to the best of knowledge.
- In many ways, we can say that it helps in understanding the nature and priorities of the customers.
- It helps to keep a track on the latest fund’s legitimate.
- It also helps in accessing the customer’s activity which helps in monitoring the accounts and keep a check on the flow of money.
Moreover, it is not one-way traffic, for the smooth functioning of the KYC process, the customers of the banks should also be very much co-operative. So here are some of the basic necessities that are required to smoothly run the KYC. And the other things that the beneficiary should know about their account are listed below:
CIP (Customer Identification Program)
You must be aware of the fact that identity theft is widespread and a lot of people get prey to this problem. There was a case in 2017 where about 17 million people lost 16.7 billion dollars from their account due to identification theft. So this might just be a threat for the customer but for the financial institutions it is more than. And according to the new rules by the institution it is said that you need to have minimum the proof of your name, date of birth, Address and the identification number which is Adhaar Card.
All the risks that a customer can have in regards to their account includes:
The types of account the bank has offered to you.
What process does the customer undergo while opening the account?
The products and services that are used by the customers.
The location, facilities, and customer’s base that the account holding organization has.
The customer due diligence
Now, this is one of the most important things for the financial organization. Before even opening the account they need to understand that person and analyze him/ her on every perspective. One wrong step in this can take you through a lot of problems. So there are now basically three steps on which the customer is delegated on:
Simplified due diligence
Simplified due diligence or SDD is the basic step that all these organizations take? And this is because once after this the risk of losing money to terrorists or fraudsters becomes minimal to no. If the organizations see that there is someone who feels suspicious, they open their low-value accounts which defends the other account openers. In accordance with the RBI KYC guidelines 2019, this has become a necessity.
The Basic Customer due diligence
Also known as CDD, this process is going to help the financial firm to provide a cover to all the other account holders by accessing the suspicious person closely. Either by knowing more about their personal stuff or something else.
These are a few topmost practices that they follow, but if there is some need for other things as well, then here are the steps that the organizations take:
They closely monitor the occupation of the person.
All the transactions they do.
What location does the person put up from and where does he transact mostly.
There are three types of KYC that can be taken under process by people who have an existing account. All of them are described down under:
This is a very speedy and accurate way to complete your KYC. The adaptability of this process with your account is very good an there are no flaws that you would have to see. The errors that fall in the place are minimal to no errors and apart from everything you see, the process is faster than any other. You can also check the KYC document’s list online while filling the form.
The better and easier way which most of the account holders find is the mobile KYC. You don’t have to go anywhere, you don’t have to keep anything in mind because everything happens quickly and at the comfort of your house. The mobile KYC also helps the customer to check out the ongoing transactions and every activity that happens in their account. Also, on the other hand, this KYC process also gives a lot of leverage to the financial organization to keep a regular check.
The authentic and old age way of KYC is corporate KYC. In this, the beneficiary has to visit the bank in order to check the things with them. Once you visit here, the forms, attesting process, and other stuff are going to happen here itself. You just have to follow all the steps that are necessary for you to follow, later to which the process is completed in your presence.
So these are the KYC rules and things that you should keep in mind. All of them are going to benefit you with one or the other way. Just keep in mind that all this is going to keep your account and money safe.