What is C-KYC? How does it differ from KYC?

by Vested Team
January 4, 2022
3 min read
What is C-KYC? How does it differ from KYC?

To use Vested Direct, you need to complete your C-KYC

First, let us understand what is meant by Know Your Customer (KYC). Know your customer (KYC) is a procedure that is used by financial institutions to authenticate the identity of an individual and his address through a set of relevant documents. However, the KYC process has a different format for different financial institutions. With the introduction of C-KYC or central KYC, the customer does not need to complete the KYC process with different institutions.

The Reserve Bank of India mandates that regulated entities (REs) like banks, mutual fund houses, investment managers/advisors and so on should capture the customer’s KYC records and upload it to the central KYC registry within 10 days of commencement of any account-based relationship with the customer. When a customer wants to establish an account-based relationship with an RE, he needs to give them the KYC identification number with an explicit consent to download the records from the central KYC registry. On doing so, the customer does not require to submit KYC records or any other information, provided there is no change in any information. A customer may also be asked to submit his KYC records if a RE wants to undertake enhanced due diligence. 

Why does our banking partner need C-KYC?

As mentioned above, if you get your C-KYC done, you can avoid getting a new KYC done every time you start a relationship with a financial institution.

In light of COVID-19 restrictions, offline KYC might not be possible now and all banks may not have an option to conduct the video KYC process. Also, you may not have a bank branch nearby to complete the physical KYC verification process. 

However, to access all the services of our partner bank and to perform cross border remittance transactions, it is important that you get your KYC done.  Hence, it is important that you complete the C-KYC process to avail the Vested Direct feature through our banking partner.

How does our banking partner find C-KYC?

Our banking partner can find out whether you are registered for C-KYC. Your C-KYC status can be queried on the basis of your PAN. For this, your PAN needs to be compulsorily linked to your C-KYC.

You do not need to mandatorily link your PAN with your C-KYC account because some institutions may not require PAN when opening an account. However, when you are investing in securities or mutual funds, PAN becomes a mandatory requirement. In case your PAN is not linked, our banking partner cannot validate your C-KYC.

How to get a new C-KYC/update C-KYC?

So, to use Vested Direct it is important that you get your C-KYC done. If C-KYC is not linked to your PAN, you need to update your PAN.

You can go to any RBI regulated institution to get your C-KYC done. This could be a bank, an insurance company, a mutual fund house, a mutual fund distributor (who is regulated by Sebi). You can also update your PAN number to your C-KYC by following the same procedure.

For this you need a correctly filled C-KYC form and photocopies of required documents which are:

a) Duly filled and signed C-KYC application form OR KRA application form + Supplementary CKYC form

b) One proof of Identity (self-attested copy)

c) One proof of Address (self-attested copy)

d) One photograph

The form and documents are required to be physically verified and attested. Since an in-person verification is required, the process cannot be done online. 

In short, to be able to use Vested Direct, you need to complete your C-KYC. Once that is done, you can start investing in US stocks in a seamless and easy manner. 

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