Know your Customer (KYC)

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ARUN SHINDE, Consultant, India
The Know Your Customer (KYC) principle - also called Customer Due Diligence or CDD - prescribes that a financial institution has to know its customer well before they are accepted as a customer. Before someone can open an account, purchase an investment product or take out a mortgage or loan, he or she must be identified and screened: who is this person, of what country is he a tax resident, can he pose a risk, what are the intentions with regard to the financial product to be purchased? Following various legislation including the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA), it has become mandatory for financial institutions to follow KYC (Know Your Customer) norms while on-boarding any new customers. It is a one-time mandatory process. Specifically financial institutions like banks, mutual funds, insurance companies, NBFCs (Non Banking Financial Companies) are required to obtain information about the identity and address of their customers. Th (...) Read more? Sign up for free

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  Molokanova, Professor, Ukraine

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