Explain in brief what is KYC?

Question

Accepted Answer

KYC stands for Know Your Customer. It is a process of verifying the identity of customers to prevent fraud and money laundering.

KYC is mandatory for opening bank accounts, applying for loans, and investing in mutual funds.
It involves collecting personal information and documents such as PAN card, Aadhaar card, passport, and driving license.
The information is verified against government databases to ensure authenticity.
KYC helps financial institutions to assess the risk associated with a customer and comply with regulatory requirements.
It also helps in building trust between the customer and the institution.
KYC is an ongoing process and requires periodic updates to ensure the information is up-to-date.

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