Full Form of KYC : Know Your Customer
KYC Full Form is Know Your Customer. KYC is a term commonly used in the investment industry, including banks, for identifying clients. KYC was introduced by RBI (Reserve Bank of India) to prevent money laundering, financial fraud, identity theft, illegal transactions and terrorist financing through banks. The customer of a financial institution is expected to provide details such as their name, father’s name, mother’s name, date of birth, address, contact number, marital status, PAN card number, etc. With this information, banks can identify customers and serve them in a better way.
KYC Full Form – Additional Information
KYC meaning is Know Your Customer, hereinafter referred to as KYC throughout the article, it refers to the business verification process in which the identity (ID) of customers is verified. KYC is often used in reference to banking regulations, which are responsible for the governance of such verification-related activities. KYC processes are being used by corporations of all sizes to ensure that their proposed consultants, agents or distributors demonstrate anti-bribery compliance.
Insurers, export creditors, and banks have now started requiring their clients to provide comprehensive due diligence anti-corruption information for the purpose of identifying integrity and probity. KYC is becoming more and more popular both in India and onboard because it is one of the best and most effective methods against financial fraud, identity theft, terrorist financing, and money laundering, etc.
KYC is one of the most popular processes undertaken by business enterprises and therefore, holds great relevance. So, for the purpose of understanding more about KYC, there are few things that everyone should know about it. So, here are five points about Know Your Customer process that every person must know:
Standards of KYC : KYC Long Form
The main objective of KYC is to prevent the intentional or unintentional use of banks by criminals for the purpose of conducting fraudulent transactions, money laundering, terrorist financing, etc. The process allows banks and other companies to get to know their customers better and also to have a complete account of their financial transactions. KYC, therefore, contributes to risk reduction.
A typical KYC policy has the following key elements: KYC Means
Customer Identification Procedures
Monitoring of Financial Transactions
Typical controls under KYC policy
KYC imposes several control measures on the customers and some of them are mentioned below:
A collection of basic information relating to the customer and analysis of the same. This is usually referred in the United States of America as the Customer Identification Program (abbreviated as CIP) which is targeted at creating a comprehensive database on the concerned customer.
Determination of risk by analyzing probabilities of engagement in money laundering, fraudulent transactions, corrupt activities, etc.
Under this policy, banks can chart the behavior patterns of their customers and use the data collected in the analysis.
To monitor transactions of the customer against normally expected behavior and recording profile of the peer customer groups.
Banks are free to adopt all such measures under the KYC policy which comply with the principles of the policy and at the same time help in mitigating the risk.
The following Required KYC:
- Paytm KYC
- Amazon KYC
- Amazon pay KYC
- FedEx KYC
- Phonepe KYC
- PayPal KYC
- Din KYC
- MobiKwik KYC
- Video KYC
- Kotak 811 full KYC account
- Dir KYC
- Pnb KYC
- Paytm Mini KYC
- Kotak 811 full KYC
- Ola KYC
- Icici KYC
- Axis bank fastag KYC
- Quantum KYC
- Bses KYC
- Corporate KYC
- Axis bank KYC
- Payzapp KYC
- Tpddl KYC
- Ola money KYC
- Jio KYC
KYC Laws according to country
KYC policy varies from jurisdiction to jurisdiction. KYC laws may differ depending on the country in question.
New Zealand: The KYC laws were updated and amended in 2009, which came into effect the following year. KYC is mandatory for all registered banks and financial institutions.
United Kingdom: In the jurisdiction of the United Kingdom, the Money Laundering Regulations 2007 incorporate the principles and rules related to KYC. The Joint European Steering Group on Money Laundering has provided guidelines, which are typically followed by companies operating in the UK.
South Africa: The principles and laws governing KYC policies have been set out in the Financial Intelligence Center Act (abbreviated as FICA).
India: In 2002, the RBI produced several guidelines on the implementation of KYC in all banks. In 2004, the RBI issued a directive asking banks to ensure full compliance with the KYC provisions by December 31, 2005.
United States of America: The KYC policy has been incorporated in compliance with the USA Patriot Act of 2001. Rules and regulations have been incorporated for the purposes of the Customer Identification Program (abbreviated as CIP).
Enhanced Due Diligence
KYC places the Enhanced Due Diligence standard (abbreviated as EDD) for rich clients and transactions. In the United States, EDD measures are applicable to different types of accounts, such as correspondent account, private banking, and offshore banking institutions. The EDD standard differs from jurisdiction to jurisdiction because there is no set definition of it.
Some of the characteristics of EDD are as follows:
It represents a robust and rigorous process. It requires documentation of the process so that the scope of the inspection exists for it.
The EDD relies on the initial assessment of the client. The EDD process is a tiered process that takes into account the risk posed, the quality of the information, etc.
It talks about reasonable security, which depends on many factors such as risk, jurisdiction, technology and resources. The thing to keep in mind is the probability equilibrium.
The EDD takes into account adverse information, whether physically or virtually available, that indicates involvement in activities such as money laundering or financial fraud.
On the official RBI website, the KYC program has been explained. In the same it has been stated that for the purposes of proof of identity as well as of address, the Government of the Union has notified 6 documents for it, which include Aadhar ID, NREGA ID, Passport, Voter ID, Driver’s License and PAN . card. For the purposes of the KYC process, the client must present any of the aforementioned documents as proof of identity and address. In case the document presented does not have address details, then another document that has such detail should be sent.
KYC Full Form: Know Your Client
Full Form of KYC stands for Know Your Client. This is a standard form that provides investment advisors all information about the investment knowledge, risk tolerance and financial position of the customers. The purpose of KYC form is to protect both investment advisors and clients. Clients benefit by making their advisor aware of the type of investment best suited to them based on their financial conditions.
On the other hand, KYC helps investment advisor to know what they can include in their customer portfolio. In simple terms, KYC helps businesses to verify client identities. It is often a process of bank regulations. And KYC is also employed by companies of varied sizes to ensure anti-bribery compliance of their consultants, distributors, and agents.