The full form of KYC is in fact know your customer. Now let me explain here what is KYC and what happens here. Well the first thing is that KYC that in fact Know your customer is actually the process of a business identifying as well as verifying the identity of its clients. Another thing here is that this very term is also used to refer to the bank regulation that actually governs these activities.

generally KYC is a type of form which any Bank, Gas Agency, many other important office or agencies will require you to fill before you are a customer. Or at times when you are already a customer and also you guys need to update the information provided by you previously.

The thing here is that know your customer in fact may ask any one his or her name and other things like that of address, information regarding contact, any ID proof, nominees, so on and so forth. In simple word if you want to know what actually KYC i.e know your customer is, then it is nothing but the process of a business verifying the identity of its clients. The very word is also used to refer to the bank regulation that actually governs these activities.

Why KYC is important?

Well here is one of the main thing. You all have doubts about the know your customers. Many are thinking about their importance. So look dear. This is very important. Let me explain this very things with the help of following.

First thing is that KYC that is know your customer policy is a very essential step developed across the globe. This is to prevent identity theft, financial fraud, money laundering as well as terrorist financing. There is some objective of kYC. Well dear guys and girls the objective of KYC is to enable banks to know their customers better. Also this enable in a very positive manner to understand their customer. Therefore KYC enable banks and helps them manage their risks prudently.  In this very way KYC is very important.

Documents regarding Know Your Customer

In the previous section you come to know about the full form of KYC. Well let me now focus on the another thing that is documents.

KYC Document list includes following-

1. The first thing here is passport.
2. Secondly, it includes voter’s identity card.
3. This also includes driving license.
4. Apart from this, there is Aadhar Card as well.
5. It further extends to NREGA Card.
6. Also last but not the least, PAN Card.

Standard of Know Your Customer

There are some objectives of KYC. Well this has been discussed in the above mentioned section to some extent. The main objective of KYC guidelines is to prevent banks from being used by criminal elements for activities like that of laundering of money. May be it is intentionally or may be it is unintentionally. Apart from this, related procedures also enable banks to better understand their customers and their financial dealings. Therefore this helps them manage their risks prudently. Also banks generally frame their KYC policies incorporating the following four key elements. Below are four elements. Therefore guys and girls just go for the following mentioned things.

1. The first thing here is Customer Policy.
2. The another one is customer identification procedures.
3. Also there is monitoring of transactions.
4. Risk Management.

Thus guys and girls these are some of the standards here that comes in the category of Know Your Computer. Now well as there are some objectives of policy of know your computer. That is why there are some definitions of a customer. Let me explain this with the following things. We can define a customer in the following ways-

1. A person on whose behalf the account is updated and maintained. You can say and refer to that of beneficial owner.
2. Also a person or entity which maintains an account. Further this includes a relationship, you can say relationship may be of business type, with the bank.
3. Another thing includes any one or entity that is connected with a financial transactions. And that can pose significant reputational or other risks to the very bank.
4. Beneficiaries of transactions that are conducted by professional intermediaries such as stockbrokers, Chartered Accountants, or solicitors, as permitted under the law.

Customer Due Diligence

Firstly a designated person does not have to identify information on the objective or intended nature of the business relationship of  any customer or also the beneficial owner of that very customer. The very customer is considered to present a low risk of activities like that of money laundering as well as terrorist financing.

Enhanced Customer Due Diligence

Now there is another one. This is enhanced customer due diligence. Actually Designated persons are obliged to undertake CDD measures above and beyond normal measures that is ECDD (that stand for Enhanced Customer Due Diligence) in situations that present a higher risk of money-laundering or terrorist financing. Well the extent of additional information sought, and of any monitoring carried out in respect of any particular customer, will depend on the money laundering or also depend on the activities like terrorist financing risk that the customer is assessed to present to the designated person.

Characteristics of EDD

Some characteristics of EDD (Enhanced Due Diligence) includes following-

1. The first thing here is robust. Well there are quite a few features that come under the category of Enhanced Customer Due Diligence. Here is that of rigorous. Usually this means consistent, through and accurate. Dear the process must be documented as well as available for inspection by regulators. Apart from this, the process must be SMART, not only smart but also scalable and proportionate to the risks and resources. SMART is Specific, measurable, achievable, relevant and time bound.
2. Over and above Know your customer procedures.
3. Reasonable assurance- This includes on the factors like that of risk, jurisdiction, resources and technology state of the art.
4. Relevant adverse information – Here are sources which are responsible to obtain this information. This is directly or indirectly indicative of involvement in money laundering, terrorist financing and so on.