It is critical to streamline operations while guaranteeing strong security measures in today’s digitally connected financial ecosystem. The Indian government’s Central Know Your Customer (CKYC) effort tries to achieve a fine balance. By creating a centralized store for client data, CKYC streamlines onboarding saves duplication, and improves transparency across financial institutions.
C-KYC is a giant leap toward uniformity in the process of customer identification within the Indian banking industry. This centralized data store holds an individual’s KYC information, thereby negating multiple submissions to interact with different financial institutions. Aggregating customer information in a secure and standardized manner, CKYC drives frictionless transactions, heightens compliance, and fosters a more financially inclusive environment.
CKYC stands for Central Know Your Customer. It’s a source of centralized storage for KYC details of an individual stored with different financial institutions within the country. The Prevention of Money Laundering Act, of 2002, empowered the Government of India to formulate rules to prevent money laundering. Thus, the concept of CKYC was born as a proactive measure to prevent money laundering, terrorist financing, and other financial crimes in the country. It fell upon the Central Registry of Securitisation Asset Reconstruction and Security Interest, CERSAI, to maintain and manage the CKYC registry.
CKYC’s full form is Central Know Your Customer.
Upon successful CKYC registration, individuals receive a 14-digit number linked to their identity proof.
This number acts as a universal key for accessing or verifying customer information across institutions.
Customer details, including personal information and documents, are stored digitally in a secure repository, reducing physical paperwork and increasing accessibility.
Submitted documents undergo stringent verification by CERSAI to ensure accuracy and authenticity.
Changes to an individual’s KYC details are reflected across connected institutions, keeping the database consistent and up-to-date.
The CKYC process aims to simplify investments for individuals by streamlining the process.
Any financial institutions governed under the following regulatory bodies are eligible to enroll customers for CKYC:
These include banks, mutual fund companies, insurance providers, and others.
The process of completing CKYC registration involves these steps:
Identify a financial institution offering CKYC services (e.g., bank, mutual fund, insurance company).
Documents include proof of identity, address, a recent passport-sized photo, and bank account details if applicable.
Submit the documents either physically or through online submission, as per the institution’s policy.
The institution verifies documents with the issuing authorities to ensure accuracy and authenticity.
Upon verification, a 14-digit CKYC number is issued, enabling hassle-free transactions in the future.
To get the CKYC number:
Below is the document required for CKYC:
The required documents may vary depending on the entity and the product/service availed.
Opened with any of the six official documents: PAN, Aadhaar, Driving License, Passport, Voter ID, NREGA job card.
Created using Other Valid Documents (OVDs) per RBI guidelines.
CKYC registration is mandatory for all institutions registered under SEBI, RBI, IRDAI, or PFRDA. These entities are obligated to enroll their customers under the CKYC system.
While not currently mandatory for existing investors, CKYC registration will be required when investing in new mutual fund houses.
By adopting CKYC, financial institutions ensure secure, efficient, and compliant services, fostering trust and transparency in the financial ecosystem.
While CKYC, traditional KYC, and eKYC share the common goal of customer identification and verification, they differ in their approach and implementation:
| Aspect | Traditional KYC | eKYC | CKYC |
| Full Form | Know Your Customer | Electronic Know Your Customer | Central Know Your Customer |
| Process | A manual process requiring physical presence | Online process | One-time KYC for multiple financial institutions |
| Verification Method | Physical documents | Digital documents | Digital documents and biometrics |
| Purpose | To prevent fraudulent activities and comply with regulatory requirements | To make the process easier and more efficient | To avoid duplication of KYC by different institutions and provide a seamless experience for customers |
The CKYC initiative marks the beginning of standardization in the customer due diligence process in the Indian financial sector. CKYC ensures that efficiency, security, and greater inclusion are achieved by creating a centralized repository of customer information. As it continues to be adopted more, It ultimately offers a future where every transaction will be seamless with compliance. KYC Hub offers optimal CKYC solutions. To explore our product features in detail, schedule a demo with us!
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