No Need for Aadhaar Card or PAN for Bank Accounts in Future

You must now submit copies of your KYC documents in order to use any financial services, including opening a bank account, renting a locker, investing in bonds, mutual funds (MF), shares, or purchasing insurance.

The Know Your Customer (KYC) process accepts a variety of valid documents. PAN Card, Aadhaar Card, Passport, Voter ID Card, Driving License, and others are examples of common documents required.

For the in-person verification (IPV) by the relevant financial authorities or its representatives, a person must provide the original documents in addition to copies of the KYC documentation.

A person is allowed to use a different set of documents to apply for various financial services from the same financial institution or other institutions due to the acceptance of a variety of documents as KYC verification.

The Reserve Bank of India (RBI), in order to address this inconsistency, introduced the idea of Central KYC or CKYC a few years ago. This concept is intended to cover the services guided by the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI), and other financial authorities.

When completely implemented, an existing client with CKYC would simply need to give their CKYC number when requesting a new financial service anywhere in India.

However, it's claimed that CKYC's implementation also aims to make it easier for various banks to get data on how many accounts a person currently has with either the same bank or other banks.

This makes one wonder why CKYC needs to know if a customer has accounts with other banks and why another bank needs to know this information.

One of the goals may be to eliminate the practice of creating several Public Provident Fund (PPF) accounts, Sukanya Samriddhi Yojana accounts or Senior Citizen Savings Scheme accounts at various banks or post offices and depositing more than Rs 15 lakh in each.

There are concerns that because customers are already prohibited from opening multiple accounts of the same type—such as savings accounts—in various branches of the same bank, the same restriction may be extended to the entire banking system and prevent customers from opening similar accounts in different banks as well. In such a situation, the bank-specific Rs 5 lakh deposit insurance cover would thereafter be limited to a single cover all through the banking sector.

However, according to Rajnish Kumar, a former chairman of SBI, "CKYC's goal is to facilitate account opening, not to restrict it."