CKYC, or Central Know Your Customer is an Indian repository system that stores KYC information or documents of customers who engage in financial activities and avail of financial services across different financial institutions. This system was incorporated in 2013 under Section 8 of The Central Registry of Securitization Asset Reconstruction and Security Interest of the Companies Act. The act aims to eliminate the burden of maintaining KYC documents and create an easy path for customers and financial institutions.
Why did CKYC come into existence?
This law came into existence to curb the issue of earning and saving black money. Under Section 73 of the prevention of Money Laundering Act, 2002, the central government authorised a framework to locate a system that induces black money in the financial ecosphere of India. Thus, CKYC was introduced for people who want to buy or invest in the market. Moreover, the CKYC registry is managed by the Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI).
Types of CKYC
Normal account
It can be created using a PAN card, Aadhaar card, driving licence, voter ID, passport, and NREGA job card as identity proof.
Simplified/low-risk account
People who cannot provide the abovementioned documents can submit Other Valid Documents (OVDs) as per the RBI guidelines.
Small account
Customers without identity proof can open this account by submitting a form and a passport-size photo. However, you will have restricted facilities for financial transactions.
OTP-based eKYC account
This account is created on the submission of the Aadhaar card PDF file document. This document can be downloaded from the UIDAI website.
Documents required to register for CKYC
Firstly, you can visit financial institutions regulated by RBI, SEBI, IRDA, or PFRDA to register your CKYC. Under section 73 of the prevention of Money Laundering Act, 2002, these institutes are entrusted with preventing money laundering, terrorist funding, financial fraud, and evasion of taxes. As per RBI rules, to register for CKYC, you need to have a valid:
- Government form
- PAN card
- Passport
- Driving licence
- Aadhaar card
- Passport-size photo
Proprietorship firm/partnership firm/Hindu Undivided Family (HUF) and companies need to provide additional documents such as:
- Trade Licence
- Shop & business registration certificate
- PAN card of HUF, Partnership firm, Company
- Partnership Deed
- Memorandum of Association
- Articles of Association
- Board Resolution and Power of Attorney (authorisation to sign documents)
- Identification of Ultimate Beneficial Owner (UBO)
How to register for CKYC?
To register for CKYC, visit Registrar’s CAMS office and submit:
- CKYC form
- Important financial and identification documents
- Proof of Identity
- Proof of Address
- One passport-size photo
After the verification of your documents by an in-person verification process, you will receive a 14-digit KYC identification number. This CKYC number needs to be provided with every transaction of financial services.
Checking CKYC status online
To check your CKYC status online, you can visit any recognised financial institute portal and follow these steps:
- Visit and log in to the CKYC website
- Enter your PAN card details
- Enter your security code details
- You can see your CKYC number and status
Benefits of CKYC
- It enables financial companies to verify documents with ease
- Once registered, investor need not submit KYC documents before availing of every financial service
- Investors can easily update their KYC by visiting the KYC registry
- Can use CKYC while buying insurance policies, mutual funds, stock, and other financial instruments
Features of CKYC
Financial institutions may avoid the drawn-out process of customer onboarding thanks to the CKYC registry. They provide a single window where users may access all pertinent consumer data. This also contributes to significant labour and time savings. Before CKYC, opening a bank account required a lengthy process. One had to rush about to obtain the necessary paperwork for the financial institutes, taking up a lot of effort and time. However, you must go through the same paperwork procedures once more if you wish to invest in another financial institution. The client no longer needs to go through the same painstaking paperwork process, thanks to the advent of CKYC. The information is kept in one location. Additionally, this information is accessible to recognised financial organisations. By doing this, the consumer and the financial institution may save the trouble of paperwork. CKYC has the following characteristics:
- A 14-digit number called CKYC is associated with the customer’s ID proof.
- After that, the data is securely saved in electronic form.
- The provided document is then checked with the issuer.
- When the KYC information changes, all the relevant institutions are informed.
How is CKYC operated?
The completion of central KYC is now required before making any investments. This improves client understanding and further secures the investment. The financial institution keeps a copy of each customer’s KYC information. This also aids in reducing fraudulent activities in the financial industry. The consumer must fill out the KYC form before investing with any fund firm. The CKYC form must be completed and submitted with the necessary paperwork. The KYC documents are further verified by CERSAI. The KYC documents that CERSAI has validated are digitally kept on a single server. A 14-digit number is given to the consumer and is connected to his ID proof. The KYC confirmed number would be this one. If the consumer wants to invest with another fund house once the procedure is finished, he will not be prompted for KYC again. By providing the CKYC number, the Fund House can ask CERSAI to release the customer’s records. All authorised financial institutions have access to the data that has been thus saved. The data can be used by the financial institution as needed.
How to check CKYC number online?
The consumer can verify his CKYC number through any financial services institution when verification is finished. Taking these relatively easy steps:
- First, access the website of any provider of financial services that offering CKYC check.
- Secondly, the client must input his PAN number.
- The third step requires the consumer to input the security code that is shown on the screen.
- The CKYC number is shown on the screen.
How can CKYC be updated?
The CKYC status may be updated online. You must carry out the procedures specified below in order to update your CKYC:
- The “update in KYC info” may be downloaded online.
- Second, complete the necessary field that needs updating and send it to a third party such as a bank, mutual fund, or brokerage.
- Third, the agency enters the information into the corresponding KYC – registration agency, or KRA – system. The CKYC status check is also available online.
There are now five KRAs. These organisations are in charge of handling your KYC and keeping your records. These organisations are:
- CAMSKRA (by Cams)
- CDSL Ventures Limited (a division of CDSL)
- NSDL Database management Limited (a subsidiary of NSDL)
- DotEx International Limited (a unit of National Stock Agency)
- KARVY KRA (By Karvy)
By visiting any KRA website, you may check the status of your CKYC and KYC online.
What purpose does CKYC serve?
An investor can acquire any financial instrument or invest in mutual funds with the aid of CKYC. There is a KYC identity number given. The customer’s ID proof is then connected to the number. This number can be used by the investor to make mutual fund investments. Once CKYC certification is complete, the investor does not need to go through it again when interacting with another fund firm.
FAQs
What does CKYC stand for?
CKYC stands for Central Know Your Customer.
Where can I check my CKYC status?
You can visit the CDSL website or Karvy website to check your CKYC status. Moreover, any financial institution’s website can help you find your CKYC status.
Is CKYC compulsory?
No, CKYC is not compulsory, but it saves time. If you do not have CKYC, you will have to complete a KYC process on every financial service transaction.
What does OKYC stand for?
OKYC stands for Offline Know Your Customers. It is a substitution for the eKYC process.