• Know Your Customer (KYC)

    Know Your Customer (KYC) is set of customer due diligence related activities that the banks or financial institutions must perform to identify their customers  and notifying them with all the relevant important information related to all the banking and financial products.

    KYC has been mandated by the respective central banks of all the countries to protect customers from any kind of fraudulent activities, Identity theft and money laundering activities.

    KYC Control typically includes these below details

    • Collection and analysis of basic identity information (CIP)
    • Identification and verification of the customers
    • Describe client’s source of wealth and request for proper references
    • Determination of customer’s risk from any kind of fraudulent activities
    • Monitor customer’s transaction pattern and compare the same with the peer group
    • Monitor account activity to determine those transactions that do not conform with the normal or expected transactions for that customer
    • Customer Acceptance Policies
    • On-going monitoring of account with high risks and proper risk management

    Know Your Customer (KYC) policies are most closely associated with the fight against money laundering and mostly used in Wealth Management deals with large value transactions where it is more critical.

    India’s Central bank and banking regulator, The Reserve Bank of India has introduced KYC guidelines for all banks in 2002. RBI directed that all banks ensure that they are fully compliant with the KYC provisions before December 31, 2005. 

    Post Tagged with ,

Leave a Reply

Your email address will not be published. Required fields are marked *