Trading in the stock market has become extremely easy with the help of online trading apps. One can open a Demat account and a trading account with ease from the comfort of your home. Having an online trading account has become so easy that the Securities and Exchange Board of India (SEBI) has to come up with a plan to ensure identify all trades. It’s beneficial for SEBI to know the trades everyone carries for the purpose of regulations. It also reduces the chance of fraud and other malpractices.
For this very purpose, the KYC verification online is done. Initially, it was an offline process which was made available online which is also known as eKYC. KYC stands or knows your customer is used by Depository Participants (DPs) to verify any customer or trader who wishes to open a Demat account or use any of their services. As a trader, if you haven’t completed your KYC, it could lead to multiple issues. It is better to do your online KYC as soon as you can. KYC can be completed through various ways, with the easiest process to do so would be to contact your stockbroker
There are six criteria that are verified in the KYC process and each one is crucial to identify you as an individual. The various criteria are
- Mobile Number
- Email id
- Income Range
These are the mandatory details that must be provided by the trader or their trading accounts could be blocked disabling all their trading. All Demats accounts without KYC completion will have their Demat accounts frozen ensuring no shares are credited or deposited into the account. In case you do your KYC after your account is frozen, the period to unfreeze it is T+1 day. The delay occurs to ensure that your Depository Participant and the Depository can take into account your details and add it into their system.
As an investor, it is advised to always stay updated with any regulatory compliance to ensure a smooth and hassle-free trading experience. Staying updated ensures you don’t face any issues while trading making it comfortable for you. Also, ensure to complete KYC for both Demat and trading accounts to continue trading in the stock market.
In case you’re confused about how to complete your KYC or update your KYC steps, here are a few steps you can follow to complete the whole process online
- You need to visit the website of your broker or the DP where you have to complete your KYC. If you have the app for the DP you can use that as well instead of visiting the website
- On the website or in the app you can check for the ‘Update KYC’ option. Click on the option to go move forward
- You will be led to the KYC updation form. This form will already contain the information provided at the time of opening the account and you’ll have to update the rest
- Check or fill in all the details like your name, address, email Id, phone number, bank account details, PAN card details, etc.
- After the completion of the form, you’ll have to submit proof of all details entered. Ensure to submit government-authorized proof like a passport, Aadhaar card, Voter ID, ration Card, Pan card, etc.
- Ensure to have all correct documents with all of them having the current address without any disparities
- For the bank account, you’d have to provide a copy of your cancelled cheque containing your name, clearly and provide the IFSC code and other account details.
After completing all of these steps, your part of the job is done. All details submitted from your end will be further verified by the DP and the depository. It will take at the most two working days for the whole process to be completed and for your KYC to be approved.
KYC helps eliminate multiple issues like identity theft, money laundering, financial fraud, etc. Identity theft is avoided as DP can identify each and every customer, and crimes or money laundering are reduced as all transactions are tracked and associated with you. It’s extremely difficult to carry out fraudulent activities as KYC helps if mapping the customers and their transactions to ensure no fake transactions are made.
KYC is something you must do and check if it is completed on every platform to ensure to never lose your funds and carry out trading without any issues. The whole KYC process can be completed online and you can use your online trading account to continue trading account in the stock market.