What is a KYC Document?

KYC process is a fundamental step in obtaining a personal loan, ensuring the authenticity of the borrower and protecting against financial crimes. It requires the submission of specific documents that verify your identity and residential address, which is a standard procedure across lending platforms.

When you initiate the process of obtaining a personal loan, the lending platform will require you to undergo a verification procedure known as KYC, which stands for Know Your Customer. This essential step is designed to confirm your identity, ensuring that you are the person you claim to be, thereby safeguarding against illicit practices such as money laundering.

The KYC process involves submitting documents that verify both your identity and your residential address. This verification is a critical component of the loan application process, ensuring the integrity and security of financial transactions.

Documents Required for KYC Verification

To complete the KYC process, you will need to provide certain documents that serve as proof of your identity and address. These documents are crucial for establishing your credibility and for the lender to comply with regulatory requirements.

Identification & Address Proof
1. PAN card
2. Aadhaar card, passport, driver’s license
3. ID card with photograph issued by any central/state department, statutory or regulatory authorities
4. ID cards issued by banks and public financial institutions
5. ID cards issued by colleges affiliated with universities
6. Passport, voter’s ID, lease agreement, ration card, flat maintenance bill
7. Utility bills such as electricity or gas bills that are less than 3 months old
8. Bank statements
9. ID card with address like Aadhar card, utility bills, etc.
10. Residency proof issued by a notary public, gazetted officer, parliament, bank managers, multinational foreign banks, or scheduled cooperative banks

How Does the online KYC Process Work?

The process for online KYC is as follows:

Collecting Information: The first step of KYC verification involves collecting your personal information. You will be required to complete an online KYC registration form from your preferred portal through which you want to make your financial transactions.

Submit Evidence: You must verify the data you entered in the form with appropriate documents after submitting it. Usually, these documents serve as identification and address proof.

Verification: After the documents are submitted, the document templates will be identified and examined. This procedure makes sure that the given documents haven’t been manipulated.

Your data will be collected as soon as all of your documents have been confirmed. Below are the ways it can be done:

OCR, which scans the applicant’s documents for information like identity and address verification, allows the system to retrieve data immediately. After that, it looks for any discrepancies to confirm the accuracy of the data.

Without using OCR, applicants must manually enter their information into the application portal. The entered information is then verified with the details on the uploaded documents using the system’s IDV solution.

Conclusion

The KYC verification process is important to help prevent financial fraud, such as money laundering. With KYC verification, financial institutions can comply with regulatory standards and establish a trustworthy relationship with their customers. KYC also helps financial institutions understand customer requirements, preferences and risk profiles.