KYC: What is KYC, why is it necessary to update it from time to time..

Whenever you open your account in the bank, you have to submit all the necessary documents like your identity card, address proof, PAN card, and Aadhaar card. These documents submitted as KYC are to strengthen your identity. Even after opening the account, messages of KYC updates keep coming from time to time. People get it updated on the instructions of the banks, but many people do not have complete information about KYC. Today we are giving you answers to all the important questions related to KYC.

What is KYC?

KYC means Know Your Customer, it is a customer identification process. Under this process, customers submit photocopies of all the necessary documents like an Aadhaar card, PAN card, voter card, passport, etc. along with the KYC form. All companies, banks, government schemes, and financial institutions collect information related to the customer in this document, so that in the future, in case of any kind of accident, that person can be identified.

KYC rules

Under the customer identification process, companies or banks demand approved documents for identity and address and match the information given by the customer in the application with the documents. At the same time, bank services can be offered to the customers only after verification of the documents. All documents must be updated. In the absence of KYC, the bank or service provider can decide not to provide the service. Under the rules, both new customers and old customers have to follow the KYC process. Old customers have to update KYC from time to time as per the guidelines given by the Reserve Bank.

Why KYC is necessary
KYC involves collecting information about the customer's identity, address, and financial transactions to assess the potential risk. Its primary target is to ensure that the bank, financial institution, or service provider is not inadvertently involved in money laundering, terrorist funding, or other illegal activities.

In these situations, the bank can ask for KYC documents again.
If you have not submitted an Aadhaar card, PAN card, voter ID, or any such necessary document that is included in the existing list of valid documents while opening the account, then the bank can ask for new KYC documents from you. Apart from this, if the validity of the documents you submitted as KYC has expired, then in this condition also the bank can ask for new KYC documents from you.

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