POSTED BY June 7, 2012 7:58 pm ONE COMMENTON
1) What exactly is KYC ?
2) What is it’s exact purpose (Why has Government enacted it ?)
3) Can it be useful in any way in PREVENTING FRAUD AGAINST THE iNVESTOR ?
4) Is CDSL (CVL) the only agency maintaining KYC Data ?
5) In which types of Investments is KYC done (or Compulsory) & who maintains the Data in each case ?
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One reply on this article “What is KYC ?”
Dear Jignesh, Here are the answers –
1. KYC – stands for Know Your Customers
2. Govt. has started it to track the source of funds & to prevent money laundering (stopping the entry of illegal or black money or even terrorist funds into the main stream system & earning return from this).
3. Yes on the basis of KYC, there are checks & fraus can be minimized.
4. If you meant for MFs & Share investment, yes CVL is the only agency.
5. In case of Banking relationship, the KYC is done & maintained by bank itself. For Insurnce, by the insurer. For MFs & Stocks, by CVL.