Kolkata: The government is going to establish a new CKYC framework, reports say. Once a customer’s KYC is recorded in the CKYC registry, banks, mutual funds, insurance companies and other institutions can access the same records whenever needed. More important this database is periodically updated which helps in preventing fraud, bolstering identity verification and speed up transactions. For the people, it signals simplified documentation and faster verification.
What is CKYC number?
A CKYC number is a 14-digit identifier. It is unique for a person and acts as a single, centralised record of identity of a person for all financial activities. One can consider it as a permanent digital file. It will feature all that is required to establish a unique identity through ones name, address, date of birth, photo and documents establishing identity. This registry is managed by Central Registry of Securitisation Asset Reconstruction and Security Interest of India. It is an arm of the ministry of finance.
Central idea of CKYC
The central idea governing CKYC is simple. If an individual is assigned a CKYC number, he/she will no longer have to submit the same set of documents every time one goes to do things such as opening a bank account, or invest in a mutual fund scheme, buy an insurance policy or even buy a car. One can simply disclose one’s CKYC number and the organization can get the verified KYC details in a jiffy.
Features of CKYC
One-time KYC: It saves time and effort for individuals. The process generates a CKYC number which becomes a passport to all financial interactions. It can be used instead of sending photocopies or scanned pictures of all the identity documents and other proofs.
Fast onboarding: A CKYC accelerates the process of opening new accounts or buying financial products. The process of verification takes only a few minutes.
Standardised: The standard of identity verification is uniform. This reduces the risk of fraud.
Centralised record: Since the records are centralised, even a change in any one such as address need to be changed only once. Any organisation which needs to access the records will get the new information every time.
How to get a CKYC number
There is no need to apply for a CKYC number. It is automatically generated when one completes the first CKYC-compliant KYC process with a financial institution. The process begins with setting up a transaction with a financial institution that follows CKYC rules. Banks or MF houses and even brokerage houses are CKYC-compliant. One can open a new account or start a new investment with these organisation. During the process, one has to submit one’s identity and address proofs such as Aadhaar card and PAN card or passport etc.
A CKYC form will be filled up using the information from the documents. The details will be verified and a video verification has to be done. The documents and information need to be updated in the CKYC portal. Then the CKY number is generated. This 14-digit number will serve all the necessary purpose. The number will be sent directly from CERSAI via email or SMS.