Learn why the ReKYC process is important and how to complete it online?
Completing your Know Your Customer (KYC) process is an important step while applying for any financial product or service. The concept of KYC was first introduced by the Reserve Bank of India (RBI) in 2004 as a mandatory process for financial institutions when onboarding a new customer.
For instance, you will need to complete your KYC when opening a new Savings Account. ReKYC, on the other hand, is the process of updating existing information, in case it has changed. This process is as important as the KYC process.
January 10, 2024
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Understanding ReKYC
As the name suggests, the KYC process aims to enable financial institutions to verify the identity and other personal details of a customer. You must submit relevant documents with identity details, photographs and address proof to verify the same. The financial institution analyses these documents to check if they are authentic. Once everything is verified, you are onboarded to the financial institution's system.
But, it is also important to ensure that KYC details are updated regularly. Hence, financial institutions conduct a ReKYC process to update your information.
Frequency of the ReKYC process
Financial institutions classify customers based on their risk profile. For instance, a customer with massive Credit Card debt and a history of bounced EMI payments may fall into the high-risk category. Typically, such customers will need to perform the ReKYC process every 2 years. A medium-risk customer may need to go through this process every 8 years.
On the other hand, a customer who always pays the Credit Card bill on time and has a high credit score would be classified as low-risk. The financial institution would require these customers to do a ReKYC once every 10 years.
Importance of the ReKYC process
The KYC process was introduced to help prevent cases of money laundering and other types of financial fraud. It is mandatory for financial institutions such as banks, non-banking financial companies (NBFCs), credit issuers, investment companies, payment companies, and electronic money institutions, to name a few.
The ReKYC process is especially important for high-risk customers who may have their services revoked if they fail to complete it. However, ReKYC is important for all customers because it ensures that their details stay up-to-date in banking records. If the KYC lapses, their services may be stopped.
Completing your ReKYC online
Nowadays, you need not physically visit a bank branch to complete the ReKYC process. You can do it online by following these steps -
Download the banking mobile app and log in.
Visit the 'Services' section and click on 'Update KYC'.
Confirm your details, upload supporting documents and click on 'Confirm'.
Alternatively, you can log in to your Internet Banking account and repeat a similar process. The key documents to provide identity and address proof include your passport, driver's license, election card / voter ID card, job card issued by NREGA, and Aadhaar card.
Conclusion
KYC is an important process when availing of any new financial service, such as opening a bank account. The onboarding process is completely digital and your KYC process will be done via a video call. Enjoy perks such as reward programs, exclusive deals, insurance coverage and a complimentary Debit Card. The bank may contact you for a ReKYC at regular intervals, so make sure your details are updated to enjoy uninterrupted service and rewards.