KYC or know your customer is a procedure introduced by the Reserve Bank of India to verify the authenticity of a customer. The apex bank of India has mandated the completion of this process before lending any financial services.
The reason is the rise in financial wrongdoings. According to a survey from the RBI, the financial year of 2020-21 saw about 229 financial frauds every day. Moreover, the total fraud amount involved is about Rs. 1.38 lakh crore.
With a brief idea of KYC, individuals should know its importance and how failing to comply with it can result in the rejection of a loan application.
Importance of KYC process
Here are some reasons why KYC verification is of great importance –
- Establishes a customer’s authenticity and enables lenders to have the required information to refer to in case of any future issue. Additionally, it also protects an individual from identity theft.
- Protects a financial institution from being utilized as an instrument of illegal financial transactions. This process enables financial institutions to keep track of every transaction under a customer’s name and manage them accordingly.
- Safeguard the interests of a financial institution by not offering credit to applicants with a bad reputation.
Besides learning the importance of this authentication, one should also know that not every document is considered an official document for this purpose.
Official documents for KYC
Here is a list of documents that financial institutions regard as official papers for KYC –
- Aadhaar card
- Voter ID card
- Driving license
- PAN card
- NREGA card
Alongside knowing the list of documents, one should know how this process is completed for personal loans and other financial products to avoid delays and confusion.
E KYC verification online
Here is an outline of how eKYC works –
- Gathering information
The first step in this course is to accumulate the required details. However, the authenticity of this information is subjected to due diligence. Therefore, individuals need to fill up an online registration form on a portal of their preference.
- Uploading needed documents
After entering their personal information, individuals must upload related documents as proof. They can scan and upload the soft copies of their ID proof, address proof, and other papers on a website of their choice. Failing to upload these documents is one of the mistakes to avoid while applying for a personal loan.
After finishing this document upload process properly, an authentication process is started to check its validity. At first, these documents are compared against the details provided by an applicant and see if they are similar or not.
After that, different checks are performed to see if there has been any meddling with these papers. Following this check and following approval, data of these documents are extracted. There are two ways to complete this process –
- OCR is one way to confirm this information. This is an automated process where the system will fetch required information directly and then cross-check them for irregularities.
- One can also complete this process manually by entering these details into the application portal. The IDV solution present in this system will then cross-check these details against the available documents to confirm their validity.
Besides knowing what E KYC is, one should learn about the offline methods available here.
Offline KYC verification
Finishing the KYC process offline includes similar steps, but here applicants need to present the physical copy of these documents. Here is an overview of this process –
- Download or gather a KYC form from the respective financial institution
- Fill up this form correctly and be mindful about the spellings and PAN or Aadhaar numbers. Also, attach a photocopy of essential documents with this application form
- Visit your nearest KRA, and submit it with an identity proof
- Besides submitting the identity proof, financial institutions also complete a biometric scan, which you need to follow
- Once this process is complete, you will get an application number, which you can use to track the verification status of your application
Verifying these details takes time and can go up to a week. However, it is important to remember that this period changes depending on if there are problems with an application or not. Hence, fill in these details appropriately to circumvent any delay while applying for a personal loan.
To curtail this issue, leading NBFCs like Bajaj Finserv extends pre-approved offers to their present customers. These offers ease the loan application process and help them dodge the stress of verification. Such offers are available on business loans, credit cards, personal loans, and many others. Borrowers can now check their pre-approved offers by providing their essential contact information.
If you Need Answers instantly related to the KYC process, anytime and anywhere Contact Bajaj Finserv Customer Care Number.
Completing the KYC process is crucial to avail of a loan. In this regard, individuals should also be aware of the verification process of a personal loan to avoid failures there.