In continuation of my previous post, I would like to mention that the KYC requirements to onboard a new client are complex. New clients are required to submit a host of documents which may seem a bit annoying to them but they are all regulatory requirements. To add to the KYC troubles, the government authorities hire unqualified/uneducated staff to type the details in these identity documents
(PAN, Driving License etc.). Name mismatches are unbelievably common because of spelling mistakes, re-arranging the order of name, writing the wrong details etc. which are done by the government/govt. appointed agencies at the time of issuing these documents. Hence, additional documents are required to prove that you are really you!
To add to the troubles,
there are 5 different KYC Registration Agencies (KRAs). If there was one, life would be easier for everyone because cross verification would be easier. For example, let's say you opened a bank account with State Bank of India and submitted all your KYC documents to them. Let's assume that SBI is tied up with DoTex International. In the back-end, they upload your KYC data on DoTex's portal
(example) and it's going to take a while before your data is available on the registry for verification by other agencies who are checking if you are KYC registered. However, if you open an account with FYERS in the meantime, we will not be able to check if you are KYC verified until their platform shows it and also there's a procedure for this which involves a transaction cost. Hence, you'll have to submit the same KYC registration documents all over again to open an account with FYERS/anyone else. Let's assume that we are with CDSL Ventures
(CVL-KRA). Your KYC with us will be uploaded on their portal and that will take a few more days to reflect on it. If you are a fresh KYC, then it'll take some 15 days to show up. Can you believe this? At times, the under process status will remain for years. So basically it did not solve the purpose and there's an unnecessary network of 5 different KRA agencies which is one of the main cause of annoyance to everybody in the system.
To solve these problems, the Government introduced C-KYC which stands for Central Know Your Customer which will be managed by another government agency called the Central Registry of Securitisation and Asset Reconstruction and Security Interest of India
(CERSAI). But at the moment, nothing has been solved because instead of doing KYC process once, we are obliged to do it twice on 2 different platforms which have different formats. In fact, CKYC Registry uses up more time.
I had hoped that Aadhar would solve many issues in the KYC process but no! They had to mess it up for whatever debatable reason.