Financial markets today face a larger threat of suspicious activities that have a significant negative impact. As financial crimes continue to deeply impact financial markets across the globe, there is a growing need to implement stricter procedures while collecting information on customers.
As a move towards protecting institutions against financial threats, the Reserve Bank of India made it mandatory for all financial institutions to ensure complete verification of details of all customers transacting with them. Thus, to complete the verification, all individuals are required to follow the KYC procedure of the financial institution that they deal with.
Here, we will demystify KYC for new investors and explain why it is important for all those engaging in any form of financial activity.