KYC, which stands for Know Your Customer/Client, is a process used by financial institutions, including major crypto exchanges, to verify a customer’s identity during account registration. This standard procedure requires customers to provide identification documents, like a passport or driver’s license, to confirm their identity. Additionally, customers may need to submit personal information like their full legal name and home address, along with address proof, such as a utility bill or bank statement. To complete biometric verification, they might also be required to take a selfie or record a short video to match their identification.
The Reserve Bank of India (RBI) in 2004 mandated that banks, financial lenders, stockbrokers, and other financial institutions implement strict KYC procedures before onboarding new clients.
In India, two types of KYC are commonly used: eKYC and In-person-verified KYC.
- In-person-verified KYC, or offline KYC, involves personally verifying the necessary identity documents and address proofs.
- eKYC, on the other hand, can be completed online by uploading the required documents, making it a convenient and time-saving option that is widely adopted.
With the evolving financial landscape, Unified Payment Interfaces (UPIs), eWallets, and crypto exchanges have also made KYC mandatory for their customers.
