Are you planning to open a bank account, buy company shares, Mutual Funds, trade commodities or make other investments? If the answer is yes, I strongly recommend that you complete your Central Know Your Customer (CKYC) formalities immediately.
What is CKYC?
Under new laws being implemented by the Indian government, people who wish to engage in any financial transactions will now need a single Know Your Customer clearance called CKYC.
The government has authorized Central Registry of Securitization and Asset Reconstruction and Security Interest of India (CERSAI) to handle the CKYC process.
Is CKYC Important?
Earlier, you had to complete KYC procedures when opening bank accounts or making investments with individual organizations.
CKYC will eliminate the need to complete Know Your Customer formalities individually with banks, Non-Banking Financial Companies, and other similar institutions.
This is important because every time to want to open a bank account or do some investment, your CKYC number will be checked. CKYC number is called KYC Identification Number or KIN.
Without a KIN number, you may not be able to make investments in Mutual Funds and Systematic Investment Plans or participate in New Fund Offerings.
Also, the amount of money you can invest without a KIN number will be very limited. This means you might lose on an opportunity to invest in some excellent schemes to build wealth.
Therefore, I am providing you a step-by-step guide on how to complete your CKYC formalities and get the KIN, which will be very important for future financial transactions.
Documents Required for Ckyc?
The first step to do your CKYC and get a KIN is by getting your documents ready.
With PAN and Aadhar Card
Permanent Account Number (PAN) is compulsory for completing CKYC.
- Permanent Account Number (PAN): This is the most important document to get do your Central KYC. If you do not hold a PAN, I strongly recommend you apply for one at the earliest.
- Aadhar Card: If you have an Aadhar Card, link it to your PAN. This is a very simple process and has to be completed online. You can link your Aadhar card and PAN on this page of the Income Tax Department. The process takes a few minutes and you can check the status after an hour.
With PAN and Without Aadhar Card
If you do not have an Aadhar card, you can use any other government-issued proof of identity and address.
- Valid Passport.
- PRAN Card issued by National Pension Scheme.
- Passbook of Department of Posts or other banks that carries your picture.
- Driving License issued by any Indian state that mentions your current address and picture.
- Photo identity cards issued by Mahatma Gandhi National Rural Employment Guarantee scheme.
- Senior Citizen ID card issued by the state or Central government.
- Any other government-issued ID card or proof of your identity and permanent residence.
Securities and Exchange Board of India has authorized several KYC Registration Authorities, NBFCs, and other agencies to complete CKYC formalities on behalf of CERSAI.
If you are investing in Mutual Funds, ask the bank or NBFC about the nearest CKYC center. If you are not an investor, you can visit any Mutual Funds distributor or registrar in your area to complete CKYC formalities.
Remember, you cannot complete CKYC formalities online. CKYC is done in-person only. This means you have to visit the nearest center that offers this service.
Carry all the documents I have listed above to complete your CKYC formalities. I recommend you take very clear photocopies of these documents since they have to be submitted to CERSAI for completing your CKYC.
Giving blurred or unclear copies can delay the process and you may have to visit the CKYC center again.
CKYC is Simple Process
When you visit the CKYC center, request for the appropriate form. The form consists of two pages.
- Fill in the relevant details such as full name, date, and place of birth, gender, permanent address and address for correspondence.
- You also have to state your profession, annual income bracket, and taxpayer status.
- Affix a small picture and sign below it.
- At the CKYC center, an officer from the bank or NBFC will verify your forms and the documents.
- You have to self- attested photocopies of documents you submit before this official.
- Generally, your picture will also be taken by the official using a small PC-mounted camera.
- If you hold Aadhar card, the official with authenticating it with your fingerprint.
The entire process takes about 10 to 15 minutes. You will be issued a CKYC application acknowledgment for future reference.
Checking Your CKYC Status
Depending upon the CKYC center where you completed the formalities, your KIN should be available within a week to 30 days. The process can sometimes get delayed due to heavy rush.
However, the application acknowledgment is sufficient proof that you are CKYC compliant.
Checking your CKYC application status is very simple and is done online.
Simply click on this link to get details of your Electronic KYC (e-KYC) and CKYC application status.
If the link does not indicate your CKYC application number of KIN, there is nothing to worry about. You can always contact CERSAI or the CKYC center where you filed an application to know the status.
Getting the KYC Identification Number (KIN)
Usually, CERSAI or the CKYC center will inform you about the KIN through email. Alternatively, you can also check if you have been allotted the number through this link that provides details of your e-KYC compliance.
Using CKYC and KIN
Currently, CKYC and KIN are compulsory for all new investors in Mutual Funds and Systematic Investment Plans.
At a later date, CKYC and KIN are likely to become mandatory for all financial transactions such as opening new bank accounts, investing in stocks through Initial Public Offering and share markets and availing various other investment and savings products.
As with any other financial document, ensure that your KIN and CKYC details do not fall into wrong hands.
As I have explained, getting CKYC and KIN is quite easy. It only requires some effort from your side.
I personally believe that CKYC is a very good system that will ensure the safety of your investments and ensure your personal details are not used fraudulently.
Another objective of CKYC is to ensure that stock markets of India remain safe for investment by common persons.
It reduces the risk of criminals trying to use stock markets and other investment options for money laundering purposes. Currently, CKYC is important for resident and Non-Resident Indians (NRIs) wanting to invest in Mutual Funds.