Forget KYC rigmarole! Soon all your records will be stored in the central registry

In order to cut down on paperwork and red tape in financial transactions, the Finance Ministry has come with a new rule. The customer can now escape from enduring the 'Know Your Customer' (KYC) rigmarole at the beginning of every relationship with a financial intermediary.

As per the notified rules, your record would be stored in a central registry that is going to be established this month. Customers can forget about the lengthy and cumbersome process of KYC.

A senior Finance Ministry official told ET that financial institutions such as banks, insurance companies, and stock market intermediaries would all be covered under this rule.

A customer will first furnish his/her KYC details to a bank, which will pass these details on to the registry.

The registry will verify all your documents and issue a KYC identifier that will could be quoted and used whenever any new account is opened in any institutions. The move will help the government to keep check the flow of black money and money laundering.

Moreover, any change can be sought at one of the reporting agencies, such as a bank, and these will be updated in the registry. A customer need not visit the concerned intermediary.

Therefore, the permanent account number (PAN), passport, driving licence, Aadhaar or national population registry number will be a proof for the identification of customers.

At present, there is a common KYC for stock market products but not for banking and insurance.

Customers have to go undergo the complex KYC process separately for every banking product even with the same institution. For example, KYC for a savings bank account does not work for opening a fixed deposit account. This makes the process of acquiring a new financial product cumbersome.

The special investigation team on black money has asked the government to allow access to central registry data to all law enforcement agencies and the Registrar of Companies.

(Image: Indiatimes)