What is CKYC?

  • CKYC refers to Central Know Your Customer. This facilitates investors to complete their ‘Know your Customer (KYC)’ only once instead of with different entities across the financial sector to make investments.
  • The main purpose behind introducing the CKYC is to reduce the burden of KYC formalities and its verification with different financial institutions separately.
  • CERSAI (Central Registry of Securitization Asset Reconstruction and Security Interest of India) is the authority to maintain CKYC.

This is what CKYC means. There are different types of KYC. The information on the general KYC form and the CKYC form are different. CKYC requires more information about the investor to be submitted to CERSAI.

  • Generally, the KYC process is the process of identifying an investor’s ID with written details submitted by him/her through the form by the KYC Registration Agency (KRA). They upload the investor’s data to their database. Nowadays most financial institutions have supplemented it with an In-Person Verification (IPV) process. On the other hand, eKYC is the verification process using an investor’s Aadhaar number through OTP.
  • CKYC is the latest addition by the government and other types of KYC will not be necessary once CKYC is fully implemented in the country. CKYC formalities include submission of additional information about the investor like maiden name, mother’s name, FATCA (Foreign Account Tax Compliance Act) etc.
  • There are multiple KYCs because it helps to check money laundering that has become a big issue worldwide supporting illegal activities. To ensure that the funds are not used in the wrong dealings, CKYC is mandatory in India.

The simplest and safest form of investment is fixed deposit (FD). A fixed deposit offers a fixed rate of returns without getting affected by the market conditions. Once you have opened your FD account, the interest rate will be the same for the entire tenor.Bajaj Finance FDaccount can be opened online easily to get returns at a higher interest rate as compared to banks. Along with high interest rates, you can also reap additional benefits such as option to choose the frequency of periodic interest payouts, loan against FD facility, end-to-end online application process, and assurance of returns guaranteed by CRISIL and ICRA ratings.

What is CERSAI?

  • CKYC is an initiative by the Indian Government. The duties for Central KYC Registry (CKYCR) are assigned to the Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI).
  • CERSAI is the centralized repository of KYC records of every investor in India with uniform KYC norms. It keeps KYC records safe electronically.
  • It provides KYC data to the financial institutions against some charges from them.

What is KIN?

After the completion of CKYC, investors are allotted a unique KYC identification number (KIN). It is a 14-digit unique code to be used by investors at the time of conducting any transaction with a financial institution.

Investors will receive an SMS / email by CERSAI to their registered mobile number just after the KIN is generated. Make sure you provide an active mobile number and email ID in the CKYC application form because CERSAI do not send any physical intimation about the successful CKYC process.

Investors categories for CKYC Compliance

CKYC is not mandatory for every type of investors. Only Resident Individuals and NRIs need to complete their CKYC formalities.

CERSAI’s system is not integrated with other KYC institutions like KARVY KRA. Therefore, 

You need to provide KYC documents in paper format. There is no paperless procedure. Such non-integration is slowing down the implementation of CKYC that was introduced in the year 2017.

The PAN card is not required for CKYC but an individual’s date of birth is important information. Documents required to be submitted for CKYC compliance:

  • CKYC application form
  • Identity proof copy
  • Address proof copy
  • Passport size photograph

Benefits of CKYC

  • Investors need to upload their documents in one place once only which reduces the burden of regular formalities for verification.
  • More safety as all KYC data is available across all regulators in the financial sector i.e. RBI, SEBI, IRDA and PFRDA.
  • Inter-usability of the KYC information across the financial sector makes the investment process faster. 

The Bottom Line

Thus, whether you are investing in shares, mutual funds or any government schemes like senior citizen saving scheme, individual investors need to complete the CKYC formalities. Have a convenient investing experience. For secured and fixed interest rate investments, one can consider Bajaj Finance Fixed Deposit offering competitive interest rates up to 6.75%.