What is the CKYC Registry and How Does it Work

The central KYC registry serves as a centralized KYC repository, storing information and documents about a customer conducting a financial transaction or utilizing financial services. 

The Central Registry of Securitization Asset Reconstruction and Security Interest (CERSAI) was given the responsibility of managing the CKYC registry as well.

To promote ease of doing business, the government formed a KYC registry, which will in turn reduce maintaining KYC documents by the financial institution.

What exactly is KYC, and why do I need to provide KYC documentation?

Submission of KYC documents for Proof of Identity (POI) and Proof of Address (POA) is mandatory for customers and clients who want to open a bank account or open a Demat account.

The primary goal of the government, the Reserve Bank of India, and regulatory bodies such as the Securities and Exchange Board of India (SEBI) and the Insurance Regulatory and Development Authority (IRDA) implementing stringent KYC policies is to prevent money laundering, terrorist financing, financial fraud, tax evasion, and customer or client identification.

What is the CKYC Registry and How Does it Work

The following are the KYC documents that are accepted as “Officially Valid Documents” (OVD) as per the RBI circular:

• passport, 
• driving license, 
• Aadhaar number,
• voter’s identity card 
• job card issued by NREGA

Apart from the above-listed documents, proprietorship firms, partnership firms, Hindu undivided families (HUF), and companies are required to give additional documents, including but not limited to the following:

• Trade License, 
• shop and establishment registration certificate,
• HUF pan card, partnership firm, company,
• Partnership Deed,
• Memorandum of Association,
• Articles of Association,
• Board Resolution/Power of authority authorizing the employees to sign documents,
• Identification of the Ultimate Beneficial Owner 

Short-term investments

A few of the  short-term investment  include a balanced investment portfolio, which includes a mix of short- and long-term investment options that can cover your future and immediate goals. 

An investor’s portfolio may be grounded by making short-term investments. They are highly liquid assets that provide investors the freedom to make money they can immediately take if required, even if they normally yield lower rates of return over time than investing in an index fund.

• Fixed Deposit

Fixed Deposits offer guaranteed earnings on your investment that are one of the best 1-year investment plans, selecting a dependable issuer for savings in fixed deposits gives certain extra advantages as well, like high credibility and stability, an end-to-end online investment process, an online FD calculator, and higher interest rates for senior citizens, employees, and existing customers.

• Ultra-short-term funds

These mutual fund schemes are similar to liquid funds. Ultra-short-term funds can invest in securities that mature within a week or up to 18 months.

It is important to remember that such funds can be quite different from each other, making it difficult to keep track of them. However, the returns on these funds can be higher than liquid fund earnings over nine months.

• Liquid funds

Liquid funds invest in short-term securities, similar to government securities, and are more tax efficient. You can expect better returns than a savings bank account. Still, investing in these funds can be quite complicated and requires in-depth topical knowledge.

• Recurring deposits

If you cannot invest a lump sum of money and instead want to invest on a monthly or quarterly basis, you can opt for a recurring deposit. It can be opened for a fixed period, and deposits may be made at fixed, predetermined intervals that can be monthly or quarterly. The minimum tenor for a bank recurring fixed deposit is six months, and contributions toward these deposits can be low but regular.

Conclusion

When you are making investments for your near future, it is very necessary to make investments in financial instruments that generate returns over a shorter period. Although fixed-income investments give returns that are guaranteed, market-linked instruments often provide investors with profitable returns over the long run. Therefore, while funding in short-term investment instruments, it is better to use products such as FDs that imply ideal returns.