The Reserve Bank of India has made a mandatory rule for banks, financial institutions, and other organisations to verify the identity and address of all customers who do financial transactions with them. This, to make the process easy, KYC method is used. KYC or Know Your Customer is a method through which banks or financial institutions can verify the identity and address of the individual.
KYC allows an institution to authenticate the investor's identity and address. The individual has to submit its KYC before starting to invest in various financial instruments like mutual funds, fixed deposits, bank accounts, etc. KYC is done just once when the person begins to invest for the first time. KYC ensures that banks are not used for doing money laundering activities.
There are three steps by which one can complete the KYC procedure:
Online (Aadhaar KYC):
Aadhaar Biometric: If one possesses Aadhaar Card then they can go for this procedure. They can simply request the official to collect the details and they’ll verify it by matching the fingerprint.