What is KYC and How it is Done

KYC is the acronym for know your customer which refers to the due diligence which is taken by the banks and financial institutions so as to check credentials of the customer of the bank. In other words it is carried out in order to establish the identity of the person who has come for opening a new account with the bank.

Know your customer or KYC procedure should be the key principle for identification of an individual or a corporate while opening an account with the bank. It can be done in 2 ways –

1. Either through an introductory reference from an existing account holder or a person known to the bank.

2. On the basis of the documents provided by the customer and then checking on the documents to see whether they are in accordance with that of the guidelines issued by the central bank of the country.

KYC does not end with the opening of a new bank account; rather it is a continuous process of monitoring of the transactions done by the customer of the bank. Therefore bank should follow know your customer norms carefully so that bank does not have to suffer later on due to non compliance of KYC norms.

0 comments… add one

Leave a Comment


Related pages


types of retail bankswhat does accrued income meanadvantages and disadvantages of publicity in marketingdisadvantages of advertisementthe merits and demerits of internetadvantages of dcfpositives of urbanisationconvention of materialitycash flow statement wikiwhat are the characteristics of a traditional economyinfosys kpodemerits of mixed economyadvantages and disadvantages of stock marketadvantages and disadvantages of command economydisadvantages of competitive pricingexamples of indirect quotationwhat is the difference between systematic and unsystematic riskcomplementary goodsimportance of capital budgeting techniquesadvantages and disadvantages of electronic bankingdefine payback methoddefinition of chequesbank loans advantages and disadvantagesrrbs bankdirect and indirect quotation examplesoligopoly disadvantagesthe balance in the prepaid rent accountadvantages and disadvantages of transfer pricingsocialist economic system advantages and disadvantagesprivatationspenetration pricing definitionwhat is idle time in cost accountingperfect pure competitionlaw of diminishing utility exampleadvantages and disadvantages of communist economic systemdefine mixed economic systemdirect expenses and indirect expenseswhat is command economy advantages & disadvantagessocialist economy characteristicsmateriality accounting principleupsell examplesmarket economy advantages and disadvantagesadvantages of carbon creditsfluctuations définitionunitary elastic demand graphabsolute advantage in international tradestock market advantages and disadvantagesexplain liquidity ratiowhat is the difference between accounting and economic profitimportance of capital budgeting decisionsdisadvantages of absorption costingskimming or penetration pricingconglomerate merger exampledifference between capitalist and socialistlifo benefitsdifficulties of barter systemcrr and slr meaningdisadvantages of decentralized organizational structuredirect quote currencyintroduction of barter systemmonopolistic companywhat are the advantages of a traditional economymsf full formmonopolistic firms examplesnon convertible preference sharesnormal goods vs inferior goodsdirect indirect quotationwhat is market skimming pricingbank loan advantages and disadvantagesplr sbiwhy is deflation a problemadvantages of capitalism and socialismdirect and indirect quotation