CKYC (Central KYC) and CKYC ID - All You Need to Know!

cKYC full form is Central Know your customer and it is the new KYC scheme by Indian government. KYC (Know your customer) is the process of verifying the identity and address of customer before allowing him/her to participate in a particular transaction and is an essential part of bank regulations in India.

Every individual or company performing any financial transactions in banks, mutual funds, insurance etc need to be cKYC compliant. cKYC system has become live from Feb 1, 2017 and henceforth all new investors in mutual funds or new accounts in banks need to do cKYC. Existing KYC compliant individuals don't have to do anything at this moment.

What is cKYC and Why it is Introduced?

Previously a customer or investor needed to perform multiple KYC for different form of financial transactions - e.g., separate KYC while opening a bank account, separate KYC while investing in mutual funds and stocks and so on. These were a hassle for customers. With this new cKYC, the customer will need to complete KYC process only once and will be issued a unique id. With this id, he/she can do financial transactions across different finance products - e.g., banks, credit cards, mutual funds, insurance, stocks etc.

There were initiatives in the past from Mutual funds where they consolidated KYC with a KRA (KYC Registration Authority) and one need to do KYC only once across different mutual fund transactions. But this KYC was still different from bank KYC and KYC needed for insurance etc. Central KYC (cKYC) fixes this problem.

What is cKYC ID or central KYC identifier

Once cKYC is performed successfully for an individual, he/she will get a 14 digit KYC Identifier also called cKYC ID. Later when that individual wants to do a transaction with another financial entity, he/she can tell their KYC ID and they won't need to do go through the KYC process again.

cKYC - Verifying Status

Currently there is no online website or portal to check the status of your cKYC. As per the government, if your cKYC is successful, it will generate a 14 digit KYC ID and send you through sms and email to your provided mobile number and email id.

If you have got the 14-digit ID, then cKYC has been successful.

cKYC - Current State and Action Needed

cKYC has been formally introduced through SEBI (Securities and Exchange Board of India) circular no CIR/MIR/SD/120/2016 (Nov 10, 2016) and CIR/MIR/SD/66/2016 (July 2016). Govt has created Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) to handle this central KYC process and database. CERSAI now officially operates the "Central KYC Records Registry" called CKYCR to manage cKYC process.

Currently government has sent instructions to all intermediaries (e.g., banks, mutual funds etc) to ensure that all new investor and banking customers are cKYC compliant. So all new customer need to fill ckyc form and submit relevant id and address proof while opening a new bank account or new mutual fund investment.

There is no action for existing KYC compliant individuals or organizations as of now. Soon all financial intermediaries (e.g., banks etc) will be issued instructions to upload their existing KYC data for cKYC.