What is the importance of KYC in banking?

The full form of KYC is Know Your Customer. It is a common term, used frequently by banking, broking, and other financial firms and companies, for the formal procedure of obtaining all the information they can about the customer as volunteered by the customer themselves. KYC forms are to be populated and submitted by the customer before they begin transacting with a financial institution. KYC in banking helps a profile of the customer with the bank, to which all future transactions and activities are linked. It is also a form of due diligence. The process is in line with government regulations that require that proper records of customer information be maintained by banking and non-banking financial institutions.

Importance of KYC in banking
The banking and finance industry is exposed to money laundering, fraud, and financing of criminal activity. To curb and regulate the industry, it is important to conduct a