Know Your Customer (KYC)

KYC means Know Your Customer /  Know Your Client which is a mandatory  process of verifying the identity of the client when opening an account and managing financial transactions over time.

The KYC procedures fit within the broader scope of a financial institutions Anti-Money Laundering (AML) policy. KYC processes are also employed by companies of all sizes for the purpose of ensuring their proposed customers, agents, consultants, or distributors are anti-bribery compliant, and are actually who they claim to be. 

Initially, these regulations were imposed only on the financial institutions but now the non-financial industry, fintech, virtual assets dealers, and even the non-profit organizations are liable to oblige.

The objective of KYC guidelines is to prevent businesses from being used by criminal elements for money laundering. 

KYC is applicable for, 

  • a person or entity that maintains an account or has a business relationship with the reporting entity;
  • one on whose behalf the account is maintained (i.e. the beneficial owner);