In the age of globalization, authorities have never been more desperate to find a reliable way of verifying one’s identity. In-person Verification or IPV is accepted to have been a significant foundation of the Know Your Customer or the KYC process overall.
On the other hand, In-person verification (IPV) involves confirming the person’s identity from the documents provided at the time of KYC. They can also be done face to face or through video calls that enable live sign-offs on the identities and documents that the users uploaded, such as passports and utility bills, respectively.
IPV stands for In-person verification is the process of confirming a person’s identity using IDs, or biometrics checks, often required by banks and agencies to ensure authenticity and prevent fraud, matching individuals to their records.
Such confirmation can be conducted in person or, with more prevalence in recent times, through a video link that enables physical examination of the proofs of identification and residence submitted by the applicant.
The justification for IPV would be the increase in the security of the monetary operations and the level of trust between the counterparts. By ensuring that the person submitting the KYC documents is indeed who they claim to be, IPV helps to Verify that the correct individual undertakes the KYC process.
The following benefits can be ascribed to IPV:
Some of the protection that comes with IPV, including Identity theft and other fraudulent activities, are minimized. In this way, when the guests arrive at the financial institution in person for identification, their documents submitted are authentic because they belong to the person of the guest as opposed to an imposter. This reduces identity-related identity-related crimes and protects the institution’s and its clients’ interests.
Banks and other money lending firms must abide by the rules and regulations set by these bodies, such as SEBI. IPV is an essential tool in the KYC process because it enforces the standards to ensure institutions have secure verification processes. To this end, attempts to meet the IPV requirements show that the institution is alive to its obligations to sound financial management and the law.
As a result of ensuring that clients observe the IPV verification process, clients and the institution are confident. When clients are assured that the institution has endeavored to verify the identity of the account holders, then they are in a position to offer their financial information and transactions to the institutions. On the other hand, institutions can be sure that they are dealing with genuine people, hence negating fraud and enhancing the confidence of clients in the institutions they deal with.
To complete IPV, customers typically need to present several documents for verification. These documents may include:
The IPV process involves presenting original identification and address proof documents during the verification. This can now be done via a live video call, where the investor shows their documents to a KYC official, ensuring that the documents match the individual on the call. This shift to online verification has significantly streamlined the KYC process, making it easier for investors to comply with regulations while maintaining security and trust in financial transactions.
As per SEBI regulations, In-Person Verification (IPV) has been mandatory for all investors since January 1, 2011. This requirement applies to all individuals, including Non-Resident Indians (NRIs) and People of Indian Origin (PIOs). The rules stipulate that:
All financial intermediaries are required to conduct IPV for their clients. This step ensures that the person presenting the identification documents is the individual they claim to be.
During In-Person Verification, the intermediary must record the following details on the KYC form:
If one SEBI-registered intermediary conducts IPV, other intermediaries can rely on this IPV without needing to perform it again. This reduces redundancy and streamlines the verification process.
With the advent of digital technology, IPV can now be conducted online through video KYC processes. Here’s how online IPV typically works:
KYC compliance is mandatory for individuals and entities engaged in financial transactions.
This includes:
In-person verification (IPV) is a vital component of the KYC process, ensuring the security and authenticity of identity verification. As regulations evolve and technology advances, IPV continues to adapt, offering traditional face-to-face and digital verification options. Understanding the importance and process of IPV helps institutions maintain compliance and foster trust with their customers.
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