What is it and how does it work? All you need to know

When you create a bank account or invest in mutual funds or stocks, you must go through a verification process. To prevent identity theft, the verification procedure verifies your identification twice and stores your information in a database.

The verification procedure is called the Know Your Customer (KYC) process. A centralized KYC is a variation of KYC that aims to use a single KYC for all types of services in the financial sector.

The central government has established CKYC to ensure that every individual who buys or invests in financial products goes through a single KYC.

Once you complete your CKYC registration, you will receive a 14-digit code that serves as your CKYC number. The number is associated with your government ID. The main organization in charge of running the CKYC registry is called the Central Registry for the Reconstruction of Securitization and Guarantee Assets (CERSAI).

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How does CKYC work?

You must go through the CKYC procedure if you are a potential investor. When you contact an institution to make an investment, they will first require you to complete your KYC and provide the necessary documentation. These documents will later be sent to CERSAI, who will assign you a unique 14-digit KYC number.

After getting your CKYC number, you don’t have to go through the KYC procedure every time you want to start an investment. By providing your KYC number and requesting CERSAI to provide your documentation, institutions will make investing hassle-free for you.

Mandatory registration of your customers under CKYC is mandatory for all financial institutions licensed by SEBI (Securities & Exchange Board of India), IRDAI (Insurance Regulatory and Development Authority of India), RBI (Reserve Bank of India) and PFRDA (Pension Fund). Regulatory and Development Authority).

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What are the different types of CKYC accounts?

  1. normal account- A regular account will be created when you submit any of the following documents: PAN, Aadhar, Driving License, Voter ID, Passport or MGNREGA Card.
  2. simplified account- When none of the above documents are available, you can submit other officially verified documents listed by the RBI, such as bank statements, property tax receipts, phone bills that are not older than two months.
  3. small account- If you do not have a legally recognized ID, you can create a small CKYC account by submitting a complete application and a photo. However, these accounts will have a limited validity and will be subject to transaction limits.
  4. OTP based eKYC account- When you submit an Aadhar based PDF file which has been obtained from the UIDAI website and has been enabled by an OTP, this account will be created.
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While creating other accounts including bank accounts, demat and trading accounts etc., you can provide your CKYC number to immediately finish the verification procedure. In India’s emerging financial sectors, document verification is easy and convenient with CKYC.


When a resident wants to do their e-KYC, they can download the KYC XML.

First published: January 12, 2023, 08:00 IST


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