Highlights of the Blog
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CKYC eliminates the need for repeated KYC submissions by centralizing records in a single repository, accessible across financial institutions.
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Every individual gets a unique CKYC number, simplifying and streamlining all financial transactions.
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CKYC supports paperless onboarding and ensures enhanced security, reducing fraud risks and saving time.
CKYC, or Central Know Your Customer, is a centralized repository managed by the Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI).
It is designed to store and manage KYC (Know Your Customer) records of individuals in a standardized format across financial institutions. The primary goal of CKYC is to simplify the KYC process for customers and institutions alike, making it more efficient and secure.
Why Was CKYC Introduced?
Before CKYC, financial institutions like banks, mutual funds, and insurance companies maintained separate KYC records for their customers. This created redundancy and confusion, as individuals had to complete KYC procedures multiple times when dealing with different organizations. CKYC solves this problem by providing a single, unified KYC record that can be accessed by authorized institutions, reducing duplication and saving time.
Key Features of CKYC
1. Single KYC Record
Once you complete your CKYC registration, your details are stored in a central repository. Financial institutions can retrieve this information without requiring you to repeat the KYC process.
2. Unique CKYC Number
Each individual is assigned a unique 14-digit CKYC identifier. This number acts as a reference for accessing your KYC record.
3. Interoperability
CKYC records can be accessed by banks, mutual funds, insurance companies, and other financial institutions, ensuring seamless KYC verification across various sectors.
4. Digital Access
CKYC facilitates digital onboarding of customers, making financial processes smoother and quicker.
Did You Know?
The CKYC initiative was launched in 2016 as part of the government’s Digital India campaign to promote transparency and digitization in financial services.
Benefits of CKYC
1. Convenience for Customers
With CKYC, customers do not need to submit their KYC documents repeatedly when switching financial institutions.
2. Cost-Effective
CKYC reduces the operational costs associated with verifying and storing KYC data for financial institutions.
3. Fraud Prevention
By maintaining a standardized and secure repository, CKYC helps in minimizing fraudulent activities in the financial sector.
4. Time-Saving
The centralized nature of CKYC drastically reduces the time spent on onboarding customers.
5. Global Compatibility
CKYC supports FATCA (Foreign Account Tax Compliance Act) compliance, enabling institutions to meet international regulatory standards.
How Does CKYC Work?
To complete the CKYC process, you need to submit your KYC documents (identity proof, address proof, and a photograph) to any financial institution regulated by SEBI, RBI, or IRDAI. Once verified, your details are uploaded to the CKYC database, and you are assigned a unique CKYC number.
Financial institutions can then use this number to retrieve your KYC details, making it easier for you to open new accounts or access financial services.
CKYC vs. eKYC
Many people confuse CKYC with eKYC, but they are different.
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CKYC is a centralized repository for storing customer KYC records.
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eKYC refers to the electronic method of verifying a customer’s identity using Aadhaar or other digital tools.
While both aim to streamline KYC processes, CKYC focuses on centralization and standardization, whereas eKYC emphasizes digitization.
Challenges in CKYC Implementation
1. Data Accuracy
Errors in data submission can lead to complications in accessing financial services. Data quality issues cost financial institutions an average of $15 million per year, highlighting the significant financial impact of inaccurate or incomplete data.
2. Awareness Gap
Many customers are still unaware of CKYC and its benefits, leading to low adoption rates in some regions. Despite the CKYC registry having over 70 crore records as of March 2023, many financial institutions report challenges in obtaining CKYC details from customers due to a lack of awareness.
3. Integration Issues
Financial institutions sometimes face challenges in integrating their systems with the CKYC database.
How to Check Your CKYC Number?
You can check your CKYC number by:
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Visiting the financial institution where you submitted your KYC details.
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Using online portals provided by financial institutions.
Here’s something interesting -
The CKYC database can also handle changes to your KYC information. If you move to a new address or update your mobile number, you only need to update it once in the CKYC system.
CKYC for NRIs
CKYC is not limited to Indian residents. Non-Resident Indians (NRIs) can also benefit from the centralized repository, enabling them to invest in Indian financial markets more conveniently.
Conclusion
CKYC is a game-changer in the world of financial services. By centralizing KYC records and making them accessible to multiple institutions, it simplifies processes, enhances security, and saves time for both customers and financial institutions.
Whether you are opening a new bank account, investing in mutual funds, or applying for insurance, CKYC ensures a seamless experience.
Frequently Asked Questions
1. How do I get my CKYC number?
To get your CKYC number, follow these steps:
- Submit your KYC documents (identity proof, address proof, and a photograph) to a bank, mutual fund, or any financial institution regulated by SEBI, RBI, or IRDAI.
- The institution will verify your details and upload them to the CKYC database.
- Once registered, you will be assigned a 14-digit CKYC number.
- You can check your CKYC number by visiting your financial institution or through their online portal.
2. How to convert KYC to CKYC?
If you have already completed KYC with a financial institution, you can convert it to CKYC by:
- Visiting your bank, mutual fund provider, or insurance company and requesting CKYC registration.
- Submitting updated KYC documents (PAN, Aadhaar, passport, etc.) if required.
- The institution will process your details and upload them to the CKYC repository.
- Once approved, you will receive a CKYC number, which you can use across financial institutions.
3. Is CKYC compulsory?
Yes, CKYC is mandatory for individuals engaging in financial transactions such as opening a bank account, investing in mutual funds, or purchasing insurance. It helps in standardizing the KYC process, reducing fraud, and ensuring compliance with regulatory requirements.
4. How long is CKYC valid for?
CKYC does not have an expiry date. Once registered, it remains valid indefinitely. However, you may need to update your details if there are changes in your personal information, such as a new address or mobile number.
