It is noticed that in banking examinations, terms with special reference to Banking are frequently asked. These terms are useful for written examination as well as interview of almost every banking examination. Aspirants are advised to read current news related banking industry on regular basis to enhance their overall general knowledge.
Here the banking team of Jagran josh is providing brief information on KYC guidelines.
What is KYC? Why is it required?
KYC means “Know Your Customer”. It is a process by which banks obtain information about the identity and address of the customers. This process helps to ensure that banks’ services are not misused.
The KYC procedure is to be completed by the banks while opening accounts. Banks are also required to periodically update their customers’ KYC details.
What are the KYC requirements for opening a bank account?
To open a bank account, one needs to submit a ‘proof of identity and proof of address’ together with a recent photograph.
What are the documents to be given as ‘proof of identity’ and ‘proof of address’?
The Government of India has notified six documents as ‘Officially Valid Documents’ (OVDs) for the purpose of producing proof of identity. These six documents are:
- Driving Licence
- Voters’ Identity Card
- PAN Card
- Aadhaar Card issued by UIDAI and
- NREGA Job Card.
You need to submit any one of these documents as proof of identity. If these documents also contain your address details, then it would also be accepted as ‘proof of address’. If the document submitted by you for proof of identity does not contain address details, then you will have to submit another officially valid document which contains address details.
If I do not have any of the documents listed above to show my ‘proof of identity’, can I still open a bank account?
Yes. You can still open a bank account known as ‘Small Account’ by submitting your recent photograph and putting your signature or thumb impression in the presence of the bank official.
Is there any difference between such ‘small accounts’ and other accounts?
Yes. The ‘Small Accounts’ have certain limitations such as:
√ balance in such accounts at any point of time should not exceed Rs.50,000
√ total credits in one year should not exceed Rs.1,00,000
√ total withdrawal and transfers in a month should not exceed Rs.10,000
√ Foreign remittances cannot be credited to such accounts.
Such accounts remain operational initially for a period of twelve months and thereafter, for a further period of twelve months if the holder of such an account provides evidence to the bank of having applied for any of the officially valid documents within twelve months of the opening of such account.
What is e-KYC? How does e-KYC work?
e-KYC refers to electronic KYC.
e-KYC is possible only for those who have Aadhaar numbers. While using e-KYC service, you have to authorise the Unique Identification Authority of India (UIDAI), by explicit consent, to release your identity/address through biometric authentication to the bank branches/business correspondent (BC). The UIDAI then transfers your data comprising your name, age, gender, and photograph electronically to the bank. Information thus provided through e-KYC process is permitted to be treated as an ‘Officially Valid Document’.
If I am staying in Mumbai but if my proof of address shows my address of New Delhi, can I still open an account in Mumbai?
Yes. You can open a bank account in Mumbai even if the address in the “Officially Valid Document” is that of New Delhi and you do not have a proof of address for your Mumbai address. In such case, you can submit the officially valid document having your New Delhi address, together with a declaration about your Mumbai address for communication purposes.
For which banking transactions do I need to quote my PAN number?
PAN number needs to be quoted for transactions such as account opening, transactions above Rs.50,000 (whether in cash or non-cash), etc.
Whether KYC is applicable for Credit/Debit cards?
Yes. KYC exercise is necessary for Credit/ Smart Cards. Since debit cards are issued only to account holders and accounts are opened only after the KYC procedure is completed, there is no need for separate KYC for issuing debit card.