Know Your Customer (KYC) is an identity verification process followed by various businesses/new customers while joining and existing customers at periodical intervals.

Why KYC is important?

The main purpose of KYC is to prevent identity theft, terrorist financing, money laundering, and financial fraud. The KYC process helps Financial Institutions and businesses understand the customer better. As per the RBI norms, KYC has become mandatory requirement.

The following details of customers are collected to complete the KYC process.

  • Legal name
  • Identity proof
  • Correct permanent address as per identity proof
  • The legal status of the entity or person.

KYC Frauds

Taking undue advantage of this provision, the fraudsters send fake SMS /text message or make fraudulent calls, by pretending to be a bank representative to gather personal details of customers. The fraudsters may provide the customers with the phishing link, or 10 digit mobile number or convince them to give access to them digital device, through which they intend to get hold of customer’s personal details to get unauthorized access to their banking accounts to steal money.

Many innocent people have lost their hard-earned money to this fraud in recent times and still continuing.