What is KYC and why is it important?
KYC (Know your customer) is a process in which the bank obtains information about the identity of its customers, thereby ensuring that the banking services are not misused.
Bank customers will use KYC procedures while opening an account. This process helps ensure that the services of banks are not misused.
What is e-KYC? How does e-KYC work?
e-KYC refers to electronic KYC. Only those with an Aadhaar number can use e-KYC. When using the e-KYC service, you must explicitly agree to authorize the Unique Identification Authority of India (UIDAI) to release your identity/address to the bank branch/business representative through biometric identification.
UIDAI then electronically transmits your data (including your name, age, gender, and photo) to the bank. According to PML rules, the information provided through the e-KYC process is regarded as an “officially valid document” and is an effective process for KYC verification.
Banks must also regularly update the KYC details of their customers. To this, banks are required to collect and verify the basic details of their customers.
In order to update your KYC, the State Bank of India (SBI) allows multiple files/documents to be used by different individuals for the purpose.
How to update your KYC with the State Bank of India?
Customers must visit the nearest State Bank of India branch and submit a copy of any proof of address and identification approved for KYC updates.
For individuals, minors, NRI, or small account holders, SBI has designated a list of documents valid for KYC.
When KYC is involved, individuals are required to provide proof of identity and address to support the bank.
What documents are required to complete KYC?
You need a voter ID, passport, driving license, Aadhaar letter/card, the certificate issued by UGC/AICTE having a photograph NREGA card, PAN card, government/Army ID card; in addition to this, any documents related to identification and proof of address (whether permanent or up-to-date).
KYC Documents Individuals
- Driving Licence
- Voter Identity Card
- NREGA Card
- Aadhaar Letter/Card
- PAN Card
What documents can be used as address proof?
- Bank account detail (Not older than 3 months)
- Telephone bill (Not older than 3 months)
- Electricity bill (Not older than 6 months)
- Certificate by a government official
- Credit card statement (Not older than 3 months)
- Ration card
- Income/Property tax valuation order
- Registered lease/license agreement/sale deed/lease agreement copies
- A letter from the university or hostel warden of the institution to the student, and should be certified by the provost/dean; if the student lives with relatives, the latter’s affidavit, ID card, and residence proof should be provided.
Rules for minors
If the minor is under 10 years of age, the individual who manages the account must submit his own identity proof to the bank.
If the account can be operated by a minor alone, the KYC specification/norms verification process will continue, just like any other individual.
Procedure for NRIs
The NRIs (non-resident Indians) can submit a copy of their passport or residence visa.
Officials of international offices, notaries, Indian embassy, and correspondent banks whose signs are demonstrable via an authorized branch of the State Bank of India must properly attest with the copy of the residence visa.
Then, the bank must update the KYC after a certain period of time according to the standards set by the Reserve Bank of India.
SBI has notified its customers of the racket, and the scammers claim that the banking institution is defrauding/conned individuals. They contacted the victim and asked for KYC verification, and instructed him or her to enforce KYC specifications in order to hack the account.
Besides this, SBI account holders can get an accident insurance benefit of Rs 200,000
If the State Bank of India (SBI), India’s largest commercial bank holders, applies for the “SBI RuPay Jan Dhan Card”, it will provide its Jan Dhan account holders with accidental injury insurance of up to Rs 200,000.
SBI said in a tweet: Now it’s time to put yourself on the road to success. Apply for the SBI RuPay Jandhan card today.
Pradhan Mantri Jan-Dhan Yojana (PMJDY) is a national financial inclusion mission that aims to ensure affordable access to financial services, namely banking/savings and deposit accounts, insurance, credit, remittances, pension. SBI stated that PMJDY accounts are exempt from maintaining an average monthly balance.
According to SBI regulations, customers must swipe their card once within 90 days to obtain accident insurance not exceeding Rs 200,000.
Who is eligible to open a Jan Dhan account?
Any Indian citizen over 10 years old can open a Jan Dhan account. You can also transfer your basic savings account to the Jan Dhan Yojana account.
Documents needed to open PMJDY:
1. If you have an Aadhaar card/Aadhaar number or proof of possession of Aadhar, no other documents are required. If the address has changed, self-certification of the current address is sufficient.
2. If you do not have an Aadhaar card, you need any of the following OVD (officially valid documents): driving license, voter ID card, passport, and NREGA card. If these documents also contain your address, they can be used as both “identity proof and address proof”.
3. If a person does not have any of the above “officially valid documents” but is classified as “low risk” by the bank, he/she can open a bank account in a bank branch by submitting any of the following documents:
a) ID card with applicant’s photo issued by central/state government departments, public sector undertakings, scheduled commercial banks, statutory/regulatory agencies, and public financial institutions.
b) A letter issued by a Gazette officer with a duly attested photograph of the person.
Minimum balance: NIL
Maximum balance amount: No upper limit (applicable to accounts that fully comply with KYC requirements)
Special benefits of Jan Dhan account
- Interest on deposit.
- No minimum balance is required.
- Easy Transfer of money across India
- Accident insurance of Rs 1.00 lakh (for new PMJDY accounts opened after August 28, 2018, accident insurance of Rs 2.00 lakh)
- The beneficiaries of the government program will receive a direct benefit transfer in these accounts.
- Access to Pension and insurance products.
- After 6 months of satisfactory operation of the account, an overdraft limit will be permitted according to the eligibility criteria.
Under this scheme, an account can be opened in any bank branch or CSP outlet. Please note that joint accounts can only be opened in branches.