One Nation, One KYC: Now the hassle of repeated KYC is over, the government is bringing ‘Portable KYC’ Arrangement

Portable KYC System Launch India: The general public can soon be freed from the long process of repeatedly getting KYC done for opening a bank account, investing in mutual funds, taking an insurance policy or opening a share brokerage account. Union Finance Minister Nirmala Sitharaman recently announced ‘Portable KYC’ Indications have been given towards implementing the system. He has directed the Securities and Exchange Board of India (SEBI) to simplify, integrate and uniform the KYC processes.

What is ‘Portable KYC’ Concept of?

Portable KYC simply means ‘verification once, valid everywhere.’ At present, even though a system like Central KYC Registry (CKYC) exists in the country, it is not completely effective in all areas. Under the new proposed system, once a person completes KYC, his or her information will be securely recorded in a central registry. After this, he will not need to undergo KYC again in financial institutions across the country. There is a preparation to connect this system with digital facilities like DigiLocker, Aadhaar e-KYC and Video KYC.

What are the problems in the current system?

However, common citizens have to face many practical problems, due to which consumers remain troubled and in many places they have to give updates again and again.

• Double Verification: Even after getting KYC done in the bank, one has to go through the entire process again for mutual funds or insurance.
• Paperwork: For every new service, new documents have to be submitted, which causes delay in opening the account.
• Data mismatch: Many times people face problems due to old records or documents not matching.
• Problem with update: In case of change of address or phone number, one has to go to each institution separately to get it updated, which is a very tedious task.

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What will be the benefit to investors?

This initiative of the government will promote financial inclusion and ‘ease of doing business’ This will prove to be a big step in that direction. Once this system is fully implemented, it will reduce customer verification costs for financial institutions and save valuable time for customers. This will be a revolutionary step under the Digital India Mission, which will further facilitate the common man’s access to financial services.