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Know Your Customer is a mandatory regulatory process that enables financial institutions to verify the identity and residential address of their clients. In the banking sector, this procedure is essential for preventing financial crimes like money laundering, identity theft, and fraudulent transactions across various platforms.
By establishing a clear profile of each customer, banks and insurance companies can ensure that their services are accessed by genuine individuals. This verification acts as a foundational step for any financial relationship, ensuring transparency and trust between the service provider and the consumer.
The evolution of technology has allowed the financial sector to move beyond traditional methods and introduce several digital-first verification processes for Indian citizens.
Physical KYC is the traditional method where a customer visits a branch or a service point to submit hard copies of their identity documents. In this process, a bank official verifies the original documents against the provided photocopies and collects a physical signature from the account holder.
Submission of self-attested photocopies of Aadhaar and PAN cards.
In-person verification where the official checks your physical appearance against the ID.
Filling and signing a physical application form at a bank branch.
EKYC means a completely paperless process where your identity is verified electronically through the Aadhaar database managed by the UIDAI. This method is highly popular because it provides instant verification and eliminates the need for physical paperwork or a visit to the branch.
Biometric verification using fingerprints or iris scans at a nearby kiosk.
OTP-based authentication where a code is sent to your Aadhaar-linked mobile number.
Direct data transfer from the UIDAI server to the financial institution's records.
Video KYC is a contemporary method that allows you to complete the entire onboarding process through a live video interaction with a bank official. This system is designed to provide the convenience of digital verification while maintaining the security of a face-to-face meeting with a representative.
Live interaction where you display your original PAN card to the camera.
Facial matching using artificial intelligence to compare your live video with your ID.
Location tracking via GPS to ensure that the customer is physically present within India.
Digital KYC involves the electronic capture of a customer’s live photograph and their officially valid documents through a secure mobile application or web portal. This method is often used by agents who visit a customer’s location to verify documents without requiring the customer to travel.
Capturing a live, geo-tagged photograph of the customer using a smartphone.
Scanning the original documents to create a secure digital record for the bank.
Electronic verification of the scanned data to ensure authenticity and prevent tampering.
CKYC refers to a centralised repository where your verified identity records are stored and can be accessed by any financial institution in India. Once you complete this process with one entity, you do not need to repeat the verification when opening accounts with other regulated firms.
Assignment of a unique 14-digit CKYC identifier to every verified customer.
One-time submission of documents that serves all future financial requirements.
Easy retrieval of data by banks, mutual funds, and insurance companies through a central server.
The existence of various KYC types ensures that every citizen can access financial services regardless of their location or technical expertise.
While all these methods aim to verify your identity, they differ in terms of technology, convenience, and the extent of their validity.
Parameter |
e-KYC |
CKYC |
Video KYC |
Primary Method |
Aadhaar-based OTP or Biometric |
Centralised database retrieval |
Live video interaction |
Physical Presence |
Not required for OTP; required for Biometric |
Required only for the initial setup |
Required via a digital video call |
Paperwork |
Completely paperless and digital |
Paperless once the record is created |
Digital capture of physical documents |
Time Taken |
Instantaneous verification |
Instant retrieval of existing records |
Usually takes 5 to 10 minutes |
Usage Scope |
Mostly used for wallets and basic accounts |
Applicable for all financial institutions |
Valid for full-service bank accounts |
Tech Requirement |
Smartphone with Aadhaar-linked mobile |
None for the customer during retrieval |
Smartphone with a high-quality camera |
Cost to Institution |
Relatively low operational cost |
Low cost after the first verification |
Moderate cost due to human interaction |
Depending on the types of KYC in banking you choose, you will need to keep a specific set of documents ready for the process.
Completing your verification online is the fastest way to get started with a new bank account, credit card, or a brokerage platform.
Navigate to the official website or download the mobile app of the financial institution where you wish to open an account.
Select the option for digital onboarding and enter your basic details such as your full name, mobile number, and your email address.
Choose your preferred method, such as video KYC or e-KYC, and provide your consent for the bank to access your personal identity data.
Upload clear scans or high-resolution photographs of your original PAN card and any other required address proof as mentioned on the screen.
Perform the live verification step, which might involve entering an OTP or joining a brief video call with a customer service representative.
Submit the application and wait for the institution to confirm your verification status, which usually happens within a few hours or a day.
Digital verification has revolutionised the way types of KYC in banking are handled, offering numerous advantages to both the customer and the bank.
eKYC is one of the most popular KYC types. It is the process of verifying the identity of a customer or client through digital channels. When opting for eKYC, you do away with the need to submit physical copies as the entire process can be completed online. You need to simply fill out the form, upload the scanned documents, and submit the KYC application for verification.
Banks require KYC to verify a customer’s identity and address, keep customer records up to date, and reduce the risk of money laundering, terrorist financing, and fraud. RBI states that KYC also helps banks understand customers and their transactions better so they can manage risk prudently.
Video KYC, or V-KYC, is an RBI-approved alternate customer identification process that uses a secure live audio-visual interaction with an authorised bank official. RBI treats it on par with face-to-face KYC, subject to prescribed controls and audit trail requirements.
Digital KYC is an RBI-defined process in which the bank captures the customer’s live photograph, the original OVD or proof of possession of Aadhaar where applicable, and the GPS location of the verification. The process is carried out through the bank’s authenticated application at the customer touchpoint.
CKYC, or Central KYC, is a centralised repository of KYC records for the financial sector that enables uniform and interoperable KYC across institutions. It also gives customers a unique KYC identifier so they do not need to repeat the full KYC process every time they open a new relationship with another regulated entity.
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