KYC

KYC (Know Your Customer) is a regulatory requirement that mandates financial institutions to verify the identity and address of their clients before providing services. In India, KYC is required for opening demat accounts, trading accounts, bank accounts, Mutual Fund investments, and Insurance policies.

The KYC process in India is governed by SEBI, RBI, and IRDAI regulations under the Prevention of Money Laundering Act (PMLA), 2002. For securities markets, investors must complete KYC through a SEBI-registered KYC Registration Agency (KRA) such as CDSL Ventures, NSDL, or CAMS KRA. Once KYC is completed with one intermediary, the record is available to all SEBI-registered entities - meaning you do not need to repeat the full process when opening accounts with multiple brokers.

eKYC (electronic KYC) has streamlined the process significantly. Using Aadhaar-based OTP verification, investors can complete KYC in minutes rather than days. A standard demat and trading account application typically requires: PAN card, Aadhaar card, a photograph, bank account details with a cancelled cheque, and income proof (for F&O trading). Digital signature and video-based IPV (In-Person Verification) have made the entire process paperless.

CKYC (Central KYC) is a centralised repository maintained by CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest of India). When KYC is completed at any financial institution, a 14-digit CKYC identifier is generated. This identifier is reusable across banks, brokers, and insurance companies, reducing duplication.

For IPO applications, KYC-compliant PAN and a demat account are prerequisites. Without valid KYC, an IPO application is rejected at the registrar level. KYC details (especially address and bank account) are kept current to avoid disruptions to dividend payments, bonus shares, and account access.