What Are The Three Main Components Of KYC?

What are KYC rules?

The Know Your Customer Rule 2090 essentially states that every broker-dealer should use reasonable effort when opening and maintaining client accounts.

It is a requirement to know and keep records on the essential facts of each customer, as well as identify each person who has authority to act on the customer’s behalf..

What are the methods of money laundering?

Money Laundering MethodsStructuring. Also called smurfing, it is a method of placement whereby money is broken into smaller deposits. … Bulk Cash Smuggling. … Cash-intensive businesses. … Trade-based laundering. … Shell companies and trusts. … Round-tripping. … Bank capture. … Casinos.More items…•May 19, 2020

What is the first component of KYC?

The first step in any KYC program is a bank’s Customer Identification Program (“CIP”) which requires a bank to collect and document a customer’s name, date of birth, address and identification presented.

What are the components of KYC?

The KYC Policy consists of the following four key elements.Customer Acceptance Policy.Customer Identification Procedures.Monitoring of Transactions.Risk Management.

What are the key elements of KYC policy?

Namely the key four elements (as outlined in the relevant figure below) for an effective KYC Programme are the following: Client Acceptance Policy. Customer Identification. Ongoing Monitoring.

What KYC 2020?

KYC and Customer Due Diligence measures The KYC policy is a mandatory framework for banks and financial institutions used for the customer identification process. … Risk assessment and management (due diligence, part of the KYC process) Ongoing monitoring and record-keeping.

What is KYC verified?

The full form of KYC is ‘Know Your Customer’ It is a verification process, officially mandated by the Reserve Bank of India, that allows an institution to confirm and thereby verify the authenticity of their customer. This authenticity is to be sure of the identity and the address of the customer.

What is KYC checklist?

As part of the KYC process you will also need to request as verification copies of these KYC documents: Certificate of Incorporation (for Companies, LLP, Trusts) GST/company tax number. Confirmation of company address (Telephone bill/Electricity Bill) Passport/Driver’s License of Primary Contact and Directors.

What is EDD in KYC?

Enhanced Due Diligence (EDD) is the KYC process of gathering data and information to verify the identity of clients, but with additional information required to mitigate the risk associated with the client. … EDD also requires “reasonable assurance” when calculating a KYC risk rating.

What documents need KYC norms?

KYC Documents IndividualsPassport.Voter’s Identity Card.Driving Licence.Aadhaar Letter/Card.NREGA Card.PAN Card.

What are the three 3 components of KYC?

The 3 steps of a KYC compliance frameworkCustomer Identification. Before checking a customer’s identification documents, it’s necessary to verify their and scrutinise all available information for any inconsistencies. … Customer Due Diligence (CDD) … Enhanced Due Diligence (EDD)

Who is beneficial owner in KYC?

The term “beneficial owner” has been defined as the natural person who ultimately owns or controls a client and/or the person on whose behalf the transaction is being conducted, and includes a person who exercises ultimate effective control over a juridical person.

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