The Know Your Customer (KYC) process is an important part of many banking transactions, from opening a savings account to loan applications. It is a mandatory process as per Reserve Bank of India (RBI) policies. In the wake of Covid-19 pandemic, banks are completing the KYC process using video technology. As such, it is important to know what video KYC is and how to complete the process in the right way so that your loan/credit card applications or savings/salary account opening processes are completed quickly and smoothly.
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The Reserve Bank of India issued a notification amending KYC norms in January 2020. This amendment permits all banks, Non-Banking Financial Companies (NBFCs), and fintech startups to complete the KYC process remotely using video technology with the following being mandatory:
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Know Your Customer (KYC) was introduced in 2002 by the RBI. It was made mandatory for banks to complete the KYC of all customers by December 2005. It helps financial institutions to authenticate and verify the identity and address of customers. It helps to ensure that money laundering and other illegal activities are not carried out by individuals. KYC is a one-time process.
The benefits of video KYC for both lenders and customers are numerous:
To start the video KYC process, follow the steps given below:
Step 1: Visit the official website of the bank or NBFC
Step 2: Fill up the details required in the online form
Step 3: Provide consent to the lender to fetch your Aadhaar details or an e-PAN verification process
Step 4: Provide access to your phone’s location for geo-tagging purposes
Step 5: Upload documents which are officially valid. These can be images on your phone, PDF files, or documents stored in the government’s DigiLocker facility. Details from these documents will be used to fill in the application form
Step 6: A One Time Password (OTP) will be sent to your registered mobile number with the message requesting you to verify the details in the form before sharing the OTP
Step 7: Once you validate the OTP, it is taken as your customer signature on the application form
Step 8: The bank will send an SMS to your registered mobile number which contains a link to the web-page hosted by the bank for the video call. Some banks automatically direct you to the webpage for the video call from their website.
Step 9: An officer will initiate the video call with you to verify the details provided based on the documents uploaded
Step 10: A live photograph will be captured during the video call which will be cross-checked with the photograph uploaded earlier. Some banks may also use facial recognition technology for confirmation with the photographs provided earlier.
Step 11: You may be required to display some documents on the video call from which the required details will be captured by the software
Step 12: You will be asked random questions based on the documents provided
Step 13: Once the call is complete, the officer makes their recommendation for approval or rejection of your application. If verification is successful, the application form will be digitally signed by the authorised officer.
Step 14: The officer will then take a printout of the application form and get your signature on the form. This will be scanned and uploaded onto the system. The original hard copy of the form maybe returned to the customer.
It is important to keep the following guidelines in mind during your video KYC to ensure that it is completed smoothly:
The documents required for video KYC would depend on the bank but are usually the following:
According to RBI guidelines, Aadhaar is not compulsory for video-KYC. Other officially recognised documents which contain the required details can be used. However, the Aadhaar number has to be given at the time of sign-up. This will be verified by the UIDAI through an OTP.
No, third-party video applications are not permitted for video-KYC.
No, the RBI has mandated that only bank employees can be the verifying agents for video-KYC.
In such cases, the video-KYC process will be restarted.
It would be helpful to keep a pen, notepad, your PAN card, and the device you are using for the video-KYC.
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