What is Central KYC (CKYC): Features and Benefits

In recent years, the Indian financial landscape has witnessed significant developments to ensure the safety and integrity of financial transactions. One such notable initiative is the introduction of Central Know Your Customer (KYC). Central KYC is a unified system that streamlines and simplifies the KYC process across various financial institutions in the country.

CKYC Meaning

Central KYC is a centralised repository of customer identification information managed by the Central Registry of Securitisation and Asset Reconstruction and Security Interest of India (CERSAI). It acts as a single access point for financial institutions to verify customer details, eliminating the need for repetitive documentation and verification.

CKYC Features

1. Simplified KYC Process: With Central KYC, customers need to undergo the KYC process only once. Multiple financial institutions can then access the verified information, reducing the hassle of repeatedly providing KYC documents.

2. Universal KYC Identification: Each customer is assigned a unique KYC Identifier (KIN), a standardised identification across various financial institutions. This ensures consistency and accuracy in customer identification.

3. Centralized Storage: Central KYC maintains a centralised database of customer details, eliminating the need for physical storage and paperwork. It allows for secure and efficient retrieval of information when required.

4. Aadhaar Integration: Central KYC is integrated with Aadhaar, India's biometric identification system. Aadhaar is the primary source of customer identification, making the process faster and more reliable.

5. Real-time Updates: Financial institutions can update customer details in real time, ensuring the accuracy and currency of information. This reduces the chances of fraudulent activities and enhances customer protection.

How Does CKYC Work?

The Central KYC Registry or CKYC is an initiative by the government to centralise the KYC process. This registry assigns a unique CKYC number to you, which you can use across various institutions. When you submit your KYC documents to the Central KYC Registry, they go through a verification process. Once verified, your details are stored in a centralised database, and you are assigned a CKYC number. Financial institutions can then access this database to verify your identity, simplifying the process for both parties involved.

Documents Required for CKYC

The documents required for CKYC include a self-attested copy of a proof of identity such as PAN card, Aadhaar card, voter ID, passport, or driving licence, and proof of address that could include a utility bill (not older than two months), or bank statement.

A passport-size photograph is mandatory. If PAN is not available, Form 60 is needed. For non-individuals, entity registration documents and authorised signatory IDs are required.

All documents must be clear, valid, and submitted along with the CKYC form to the financial institution for verification. Original documents may be required for in-person verification.

Benefits of Central KYC

The central KYC registry benefits both customers and financial institutions by simplifying verification, improving compliance, and reducing repetitive documentation across the financial system.

1. Time and Cost Savings: Central KYC significantly reduces the time and cost involved in KYC verification. Customers no longer need to visit multiple institutions for separate KYC processes, saving time and effort.

2. Enhanced Customer Convenience: Central KYC simplifies the onboarding process for financial products and services. Customers can quickly open bank accounts, apply for loans, or invest in financial instruments without extensive paperwork.

3. Improved Compliance: By centralising customer information, Central KYC enables better monitoring and adherence to regulatory requirements. It enhances the effectiveness of anti-money laundering (AML) and counter-terrorism financing (CTF) measures, contributing to a safer financial ecosystem.

4. Reduced Redundancy: The centralised nature of Central KYC eliminates the duplication of KYC efforts by different institutions. It promotes efficiency and reduces the administrative burden for customers and financial entities.

5. Strengthened Data Security: Central KYC employs robust security measures to protect customer information. It ensures data privacy and confidentiality, adhering to the data protection standards set by regulatory authorities.

Difference Between KYC, e-KYC and CKYC

To understand the CKYC process better, it is essential to differentiate between KYC, e-KYC, and CKYC.

1. KYC (Know Your Customer): This is the traditional process where you provide physical documents to a financial institution to verify your identity and address. The institution checks these documents and updates your information in their records.

2. e-KYC: This is an electronic version of KYC. Instead of submitting physical documents, you can use your Aadhaar number to complete the verification process online. This is quicker and more convenient but requires your Aadhaar to be linked with your mobile number for OTP verification.

3. CKYC: The Central KYC Registry takes the KYC process a step further by centralising it. Once your details are verified and stored in the CKYC database, you receive a unique CKYC number. This number can be used across different financial institutions, making the process more efficient.

Below is a table that highlights the key differences between KYC, e-KYC, and CKYC.

Types of CKYC Accounts

There are four types of CKYC accounts, and they are as follows:

1. Normal Account - You can open a normal account by submitting any of the following six official documents as proof of identity: PAN, Aadhaar, Voter ID, Driving License, Passport, and NREGA Job Card.

2. Simplified Measures Account - To open a Simplified Measures Account, you need to submit other officially valid documents (OVDs) that comply with the RBI circular RBI/2015-16/42. The KYC identifier for these accounts will have the prefix 'L'.

3. Small Account - When you submit only personal details and a photograph, the bank opens a Small Account for you. These accounts have a KYC identifier that is prefixed with 'S'.

4. OTP-based eKYC Account - You can open this account when you submit a photograph and an Aadhaar PDF file that you can download from UIDAI's website, enabled by OTP.

How to Complete CKYC Registration?

To complete your CKYC registration, you need to follow some simple steps, which are as follows:

• Collect all necessary KYC documents, namely identity and address proof.

• Submit the accepted KYC documents, along with your PAN number, email ID, and mobile number.

• After verification by the Central KYC Registrars Agency (CRA), your CKYC application will be shared via SMS or mail.

• You would have to appear in person at a CRA centre for biometric authentication.

After successful authentication, your registration process will be complete.

How to Check CKYC Number?

To check your CKYC number through various financial services companies, follow these steps:

• Visit the website of any financial services company that offers CKYC check.
• Enter your PAN.
• Input the displayed security code.
• The website will display your CKYC number.

Steps to Get Your Central KYC Card

• Enter your mobile number and captcha on the CKYC India’s official website
  
• Enter the OTP to verify your phone number.
  
• Submit a request to fetch your CKYC card
  
• Click on the link to download your CKYC card
  

Conclusion

Central KYC revolutionises the KYC process in India by offering a unified and streamlined approach to customer identification. It provides numerous benefits, such as simplified onboarding, reduced redundancy, enhanced compliance, and strengthened data security.

With Central KYC, the Indian financial landscape significantly strides towards efficiency, convenience, and transparency. As customers, it is important to understand the features and benefits of Central KYC to leverage its advantages while engaging with financial institutions in the country.

Source:

CERSAI