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Amit Ahuja, Senior Associate- Solutions & Markets at Navaera Worldwide

(2016-present)
Answered December 31

Banking is such an industry where the risk of financial crimes, frauds and money laundering
is very high. So it is very much important for banks to perform background checks on
customers in order to mitigate these fraudulent crimes.

People having illegal money perform high value transactions in cash so that they don't
have to pay taxes. Such people try to target banks to park their illegal money or convert
this illegally obtained money into legal, through various money laundering strategies. This
activity eventually hinders the economic growth of the country. This illegal money can be
used for criminal activities such as terror funding and similar financial crimes which leads
to compromising the national security.

If a bank has proper KYC process in place, then this will ensure that it complies with the
regulatory requirements. Moreover, it will make the on-boarding process much easier for
the new clients. A Proper KYC gives confidence to the bank that the customers whom they
would be dealing with, are genuine and there would be higher level of trust. Moreover,
banks can efficiently monitor the customer behavior and categorize them as per their risk
profile.

Thus to conclude, in order to reduce the financial crimes and protect its brand reputation,
KYC process is extremely important for banks.
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Nilesh Mundale, 5 years of experience in banking sector

5
Answered March 19, 2018

KYC stands for KNOW YOUR CUSTOMER. Any relationship starts eg saving account or FD
or RD you need to have entire details of your customer including his job profile, income
source, occupation etc

The objective of the KYC is to identity theft, prevent terrorist financing, money laundering
and financial fraud. KYC allows us to understand the customer better and manage risks
prudently. KYC collects and verifies basic details of the customers like:
•Name and authorized signatures
•Legal status of the legal entity or a person
•Identity of the beneficial controllers and owners of the account

Reserve Ba … (more)

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