“Know your Customer” a term used for customer identification process. It involves making reasonable efforts to determine true isidentity and beneficiary ownership of account source of funds. The nature of customer’s business, reasonableness of operations in the account in relation to customer’s business etc which in turn helps the banks to manage their risks prudently.
The objective of the KYC guidelines is to prevent banks being used intentionally or unintentionally by criminal elements for money laundering.
KYC refers to the steps taken by a financial institution (or business) to:
Aadhar-enable electronic know your customer (KYC) process should be "firmly established" as the acceptable KYC, a panel with representatives from all financial sector regulators has proposed