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Knowing your customers (KYC) is essential for the banking and payments industry to operate securely and efficiently. KYC helps financial institutions assess the risk of each customer they serve. Ideally, a customer's KYC information should be valid across all financial institutions in India.

However, KYC can be time-consuming and repetitive, as each financial institution must perform its own verification and validation checks. To address this challenge, the Government of India launched the Central KYC (CKYC) repository in 2016.

With CKYC, customers can complete their KYC once and use it for all subsequent financial transactions in India. This saves time and effort for both customers and financial institutions.

CKYC also helps to prevent financial fraud, such as money laundering and illicit use of funds. This is especially important in the digital payments age, where fraud is on the rise.

What is CKYC?

The Central Know Your Customer (CKYC) is a centralized repository of customer information established by the Government of India. It was created to streamline the KYC process, which was previously handled by each financial institution individually.

CKYC allows customers to complete their KYC once and use it for all subsequent financial transactions in India. This saves time and effort for both customers and financial institutions.

The CKYC also helps to prevent financial fraud, such as money laundering and illicit use of funds. This is because it makes it more difficult for criminals to open multiple accounts under false identities.

The Differences Between KYC, eKYC, and CKYC

Know Your Customer (KYC) is a process that financial institutions use to verify the identity and address of their customers. KYC is required by law to help prevent financial fraud and money laundering.

KYC is typically done by requiring customers to provide their name, address, date of birth, and government-issued ID. Financial institutions may also require customers to provide additional information, such as their employment status, income, and investment objectives.

Electronic Know Your Customer (eKYC) is a digital version of the KYC process. It allows customers to complete their KYC online or through a mobile app. eKYC is typically faster and more convenient than traditional KYC, and it can be done remotely.

eKYC uses Aadhaar, India's national biometric ID system, to verify the identity of customers. Customers can complete eKYC by providing their Aadhaar number and undergoing a biometric authentication process, such as fingerprint scanning or iris scanning.

Central Know Your Customer (CKYC) is a centralized KYC repository in India. It allows customers to complete their KYC once and use it for all subsequent financial transactions in India. CKYC helps to streamline the KYC process and make it more efficient for both customers and financial institutions.

CKYC is managed by the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI). CKYC is available to all financial institutions that are regulated by the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI), and the Pension Fund Regulatory and Development Authority of India (PFRDA).

Features of CKYC

CKYC is a unique 14-digit number that is assigned to each customer.
CKYC information is securely stored in electronic format.
The KYC documents provided by the customer are validated with the issuer.
All relevant financial institutions are notified if the customer's KYC information changes.

In simpler terms, CKYC is a unique identifier that is assigned to each customer after their KYC information has been verified. This information is stored securely and any changes to the customer's KYC information are communicated to all relevant financial institutions.

Types of CKYC Accounts

There are four types of CKYC accounts, each with different requirements for the documents that must be submitted for verification:

Normal Account: This type of account is created when the customer submits a PAN card, Aadhaar card, voter ID card, passport, driving license, or NREGA job card as proof of identity.
Simplified Measures Account: This type of account is created when the customer submits any other Officially Valid Document (OVD) as proof of identity. CKYC identifiers for Simplified Measures Accounts are prefixed with the letter "L".
Small Account: This type of account is opened when the customer submits their identifying details and a photograph. CKYC identifiers for Small Accounts are prefixed with the letter "S".
OTP-based eKYC Account: This type of account is opened when the customer completes OTP-based eKYC for customer identification and provides a photograph. CKYC identifiers for OTP-based eKYC Accounts are prefixed with the letter "O".

In simpler terms, the type of CKYC account that a customer can open depends on the documents that they are able to submit for verification. If a customer has all of the required documents, they can open a Normal Account. If a customer does not have all of the required documents, they may still be able to open a Simplified Measures Account, Small Account, or OTP-based eKYC Account, depending on the documents that they are able to submit.

Understanding the CKYC Process

The Central Know Your Customer (CKYC) process is a centralized repository of customer KYC information in India. It aims to create a unique identifier for each customer and make KYC compliance seamless and standardized across all financial institutions.

Here's how it works:

Customer Onboarding: When an individual or legal entity wants to open an account or avail of financial services in India, they must undergo the KYC process.
Data Collection: The customer must submit the required identification and address proof documents and other information for KYC compliance. Common documents include Aadhaar, passport, voter ID, driving license, PAN card, and utility bills.
Verification: The financial institution verifies the submitted documents and information. This may involve physical verification of original documents or electronic verification through authorized agencies like UIDAI (Unique Identification Authority of India) for Aadhaar verification.
Creation of CKYC Record: Once the verification process is complete and the KYC details are validated, the financial institution uploads the customer's KYC data to the Central KYC Registry (CKYCR).
CKYC Number Generation: After the customer's information is successfully uploaded to the CKYCR, a unique 14-digit CKYC Number is generated. This number references the customer's KYC information in the central repository.
Interoperability: The CKYC Number is shared with the customer and can be used across all financial institutions and intermediaries in India. This allows the customer to open accounts or avail of services from different institutions without repeatedly undergoing the KYC process.
Access and Updates: Authorized personnel from financial institutions can access the CKYCR in real-time through secure online channels to verify the KYC status of a customer. If there are any changes or updates to the customer's KYC information, the financial institution is responsible for updating the details in the CKYCR.
Regulatory Compliance: CKYC helps financial institutions comply with KYC regulations set by the Reserve Bank of India (RBI) and other regulatory authorities. It ensures consistency, accuracy, and standardization in the KYC process, reducing the risk of fraud and money laundering.
Data Privacy and Security: The CKYC follows strict privacy and security guidelines to protect customers' sensitive information. Access to the CKYCR is restricted to authorized personnel only, and customer consent is obtained before sharing their information with other financial institutions.

CKYC is a system that helps financial institutions verify your identity and address. It works by creating a unique identifier for each customer and storing their KYC information in a central repository. This allows you to open accounts or avail of services from different financial institutions without repeatedly undergoing the KYC process.

CKYC is also beneficial for financial institutions as it helps them comply with KYC regulations and reduce the risk of fraud and money laundering.

CKYC: An essential part of your Fintech journey

CKYC is a centralized repository of customer KYC information in India. It provides a number of benefits for Fintech businesses, including:

Time and cost savings: CKYC eliminates the need for Fintech companies to conduct their own KYC checks, saving them time and resources. It also reduces the costs associated with customer acquisition by eliminating the need for duplicate KYC checks and physical document verification.
Enhanced security and regulatory compliance: CKYC helps Fintech companies comply with KYC regulations set by regulatory authorities such as the Reserve Bank of India (RBI). It also follows strict data security and privacy guidelines, protecting customer information from unauthorized access.
Data accuracy and integrity: CKYC reduces the chances of data discrepancies and errors by centralizing customer KYC data in the CKYCR. This ensures that customer information is up-to-date and accurate, leading to better decision-making processes for Fintech companies and financial institutions.
Support for financial inclusion: CKYC makes it easier for underbanked and underserved populations to join the formal financial ecosystem by simplifying the onboarding process. This is especially beneficial for MSMEs and SMEs.

Overall, CKYC is a valuable tool for Fintech businesses that can help them improve operational efficiency, customer experience, security, compliance, and financial inclusion.

HYPERSTREAMS: The Next Generation of CKYC APIs

CKYC APIs and SDKs offer numerous advantages for Fintech businesses, including faster onboarding, enhanced compliance, improved data security, and a better overall customer experience. Superflow has enabled players like CreditWise to connect with various financial institutions such as CERSAI, NSDL, and UIDAI through its simple and fast CKYC APIs. CreditWise has seen a 92% hit rate with respect to successful CKYC downloads and has been able to verify the bank accounts of these verified users.

While CKYC APIs and SDKs are a valuable tool for Fintech businesses, there is always scope to do more from a technology perspective. This is where Subspace's Superflow comes in.

HYPERSTREAMS is a next-generation CKYC API that offers a number of advantages over traditional CKYC APIs, including:

Increased speed and throughput: HYPERSTREAMS can process CKYC requests much faster than traditional CKYC APIs, making it ideal for high-volume applications.
Improved reliability and scalability: HYPERSTREAMS is designed to be reliable and scalable, even under heavy load. This is important for Fintech businesses that need to be able to handle a large number of CKYC requests simultaneously.
Reduced costs: HYPERSTREAMS is a cost-effective solution for Fintech businesses of all sizes.

HYPERSTREAMS is still under development, but it has the potential to revolutionize the way that Fintech businesses perform CKYC.

How Subspace Hyperstreams can help with CKYC

The changes in Central KYC Registry APIs after v1.2 have significantly reduced the occurrences of additional helpful information in CKYC records. This means that using CKYC Download alone for your onboarding might not be a seamless process or, in some cases, fully compliant.

The documents in the CKYC registry need to be classified correctly, and according to RBI’s directions, expired documents in the CKYC registry can no longer be used as valid KYC for onboarding a customer.

Subspace Hyperstreams can solve all these problems for you.

The Advanced CKYC Download Hyperstream can automatically classify the documents in the CKYC registry and identify expired documents. This ensures that you are always using valid KYC information for onboarding your customers.

The CKYC Prefill Hyperstream can fetch all the user documents present in the CKYC Registry with just the user's name and phone number as input. This makes it easy to onboard new customers without having to ask them for any additional information.

Whether it is operating on the back of an enhanced technology like Hyperstreams or operating on its own accord, one thing is clear, as the financial landscape evolves, CKYC will play a crucial role in ensuring efficient and secure customer identification and compliance processes.

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CKYC: Everything You Need to Know