KYC (Know Your Customer)

Know Your Customer (KYC) is a mandatory regulatory process through which financial institutions — including banks, stockbrokers, mutual fund houses, and insurance companies — verify the identity, address, and financial background of their clients before establishing a business relationship or processing transactions. In India, KYC compliance is mandated by SEBI, RBI, and IRDAI under Prevention of Money Laundering Act (PMLA) regulations and the respective sector-specific guidelines. The KYC process for capital market participants requires submission of identity proof (PAN card is mandatory), address proof (Aadhaar, passport, utility bills), a recent photograph, and in-person verification (IPV) or video KYC (V-KYC) for digital onboarding. SEBI introduced the centralised KYC system through SEBI-registered KYC Registration Agencies (KRAs), allowing investors to complete KYC once and use the same verified records across all SEBI-regulated intermediaries. Non-compliance with KYC requirements prevents investors from trading in equities, derivatives, mutual funds, and other regulated financial products in India.