The term "Know Your Customer," which stands for "Know Your Customer," refers to the process of identifying a customer as part of opening an account with a financial institution. An investor's identity and address are established through KYC by the use of pertinent supporting papers, including required picture identification (such as a PAN card or an Aadhar card), address verification, and in-person verification (IPV). KYC compliance is required under the Prevention of Money Laundering Act, 2002 and the Rules enacted thereunder, as well as the SEBI Master Circular on Anti Money Laundering (AML) Standards/Combating the Financing of Terrorism (CFT)/Obligations of Securities Market Intermediaries.
There are often two aspects to a Know Your Customer (KYC):
Part I includes the fundamental and standard KYC information for the investor as required by the Central KYC registry (Uniform KYC), which all registered financial intermediaries must utilise.
When opening the investor's account, a financial intermediary like a mutual fund, stock broker, or depository participant may request additional KYC information in Part II on its own.