CKYC Explained: Simplified KYC for Faster Financial Services in India

What is CKYC?

Central KYC (CKYC) is a government program aimed at centralizing the KYC (Know Your Customer) process for all financial companies. It simplifies and standardizes the KYC procedure across institutions, ensuring compliance with KYC standards for independent investors. Previously, each financial institution had its own KYC process, but with CKYC, customer data is consolidated into a centralized repository on a single platform.

Features of CKYC

The CKYC number, a pivotal initiative by the government, offers a range of features and benefits designed to streamline the KYC process and enhance customer convenience:

  • Unique 14-Digit Identification: Upon registration, individuals receive a distinct 14-digit KYC number linked to their identity, facilitating seamless access to all KYC documents.
  • Digital Storage of Documents: CKYC eliminates the hassle of maintaining physical copies of KYC documents by securely storing them online, ensuring easy accessibility anytime, anywhere.
  • Rigorous Verification Process: All CKYC documents undergo meticulous verification and scrutiny before acceptance, ensuring the reliability and accuracy of the information stored.
  • Automatic Updates: Any modifications or updates made to KYC details are automatically synchronized across all connected institutions. This automated process ensures that databases remain current, sparing customers the effort of individually updating their information with each financial service provider.
  • Centralized Information: By centralizing KYC information, CKYC enhances fraud detection capabilities, particularly in identifying and preventing instances of identity theft or fraudulent activities.
  • Enhanced Customer Experience: CKYC significantly improves the customer experience by enabling banks and financial institutions to efficiently access and manage customer information. This streamlined process not only saves time but also enhances overall service delivery.

Who can register customers for CKYC?

Only authorized institutions can register customers for CKYC. These authorized institutions are typically financial institutions regulated by specific government bodies in India like:

  • Reserve Bank of India (RBI)
  • Securities and Exchange Board of India (SEBI)
  • Insurance Regulatory and Development Authority (IRDAI)
  • Pension Fund Regulatory and Development Authority (PFRDA)

These institutions include banks, insurance companies, mutual fund houses etc. So, when you avail any financial products from these entities, they will register your KYC details with CKYC during the onboarding process.

How to Complete the CKYC Process?

Here’s a step-by-step guide to completing the CKYC process:

  1. Find a CKYC Service Provider: Begin by identifying a financial institution or an authorized service provider that offers CKYC services. The CKYC number is typically generated when opening a new account with the institution or when submitting a Re-KYC (re-Know Your Customer) request.
  2. Document Submission: Gather all the necessary documents required for CKYC registration. These documents typically include personal information along with supporting documents such as proof of identity, proof of address, and photographs. You can choose to submit physical copies of your documents to the service provider or opt for electronic submission, depending on the provider’s preferences and procedures.
  3. Verification Process: The CKYC service provider will meticulously examine the submitted documents and verify the information provided to ensure its authenticity and accuracy. This verification process is crucial for maintaining the integrity of the CKYC database and complying with regulatory requirements.
  4. Receipt of CKYC Number: Upon successful processing and verification of the documents, you will be issued a unique CKYC number. This number serves as your identifier within the CKYC system and can be used for availing various financial services in the future. Keep this number safe and accessible for any future transactions or interactions with financial institutions.

Documents Required for CKYC

For a smooth CKYC process, you’ll need to gather the following documents:

  • Identity Proof: Present a government-issued photo identity proof such as an Aadhaar card, passport, driver’s license, voter ID card, etc.
  • Address Proof: Provide a government-issued identity proof that bears your address, such as an Aadhaar card, passport, driver’s license, voter ID card, etc.
  • PAN Card Details: Ensure you have your PAN (Permanent Account Number) card details handy.
  • Recent Passport-Size Photographs: Prepare recent passport-size photographs as part of your CKYC documentation.
  • Bank Account Details: Be ready to furnish your bank account details as required during the CKYC process.

Types of CKYC Accounts

There are four types of CKYC accounts:

  • Normal Account: This CKYC account is created when you submit any of these six official documents as proof of identity: PAN Card, Aadhaar Card, Driving License, Passport, NREGA Job Card.
  • Simplified Measures Account: This type of CKYC account is opened if you submit other officially valid documents (OVDs) that are allowed as per RBI circular RBI/2015-16/42. The KYC identifier for a Simplified Measures Account will have a prefix “L”.
  • Small Account: A Small Account is the most basic type of CKYC account. It is opened when you submit only personal details along with a photograph duly certified by the customer. The KYC identifier for a Small Account would be prefixed with “S”.
  • OTP-based eKYC Account: This type of account is opened if you submit a photograph along with the Aadhaar PDF file downloaded from the UIDAI website, which is enabled by an OTP. The KYC identifier for these accounts would be prefixed with “O”.

By offering these different types of CKYC accounts, individuals have flexibility in choosing the account type that aligns with their preferred documentation and convenience.

Difference between Normal KYC, EKYC and CKYC

Feature Normal KYC CKYC eKYC
Verification Method Physical documents Centralized repository Digital documents
Performed by Individual institutions CERSAI (Government of India) Individual institutions
Purpose Customer onboarding Store & share KYC info Customer onboarding
Scope Single institution Multiple institutions Single institution
Documents Required Physical copies of ID proof Aadhaar details stored in CKYC Aadhaar & biometrics (optional)
Convenience Less convenient Convenient (one-time KYC) Convenient (remote)
Security Relies on physical docs More secure (centralized) Secure with digital methods
Example Verifying ID at a bank Sharing KYC details with another bank Verifying Aadhaar online

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