With a huge population of middle-class people in India, the lending space is growing exponentially. According to Trading Economics, the value of loans in India increased 12% in July of 2019 over the same month in the previous year.
The statistic reveals that today more people apply for loans than ever to fulfil their needs. Particularly, personal loans have been the ultimate financial product for people to meet their unforeseen expenses such as medical emergencies, car repairs, home renovations, travel, wedding and many more.
But lending is a risky proposition for lenders because it’s hard for them to know whether the person borrowing the money is genuine or a fraud.
Therefore, banks and other financial institutions get “Know Your Customer” or KYC done to verify the identity of the customers before they do business with them.
What is KYC?
KYC in India stands for ‘Know Your Customer.’ It is a legal and a mandatory regulatory requirement used for identifying and verifying the details of a customer with the help of reliable and independent information or documents.
It helps to counter illegal activities such as money laundering. KYC is practiced not only in the lending sector but also in investments and other banking transactions too. It is an effective tool that helps prevent financial institutions from possible losses and frauds.
Know Your Customer (KYC) in India allows banks and other financial institutions to:
- Identify the customer accurately.
- Check the customers’ activities and determine their source of income.
- Assess if there is any risk of money laundering associated with the customer.
As a customer, you need to fill up the Know Your Customer (KYC) Form when you want to:
- Invest in mutual funds
- Open a bank account
- Request for financial planning services through a registered board
- Apply for a credit card, personal loan, home loan or any kind of a loan
- Change the signatories, beneficial owners, etc. on your accounts
How KYC help in loan approvals?
The Reserve Bank of India directed all banks, online financial lenders and lending platforms to obtain KYC information to prevent identity thefts, money laundering, financial frauds, signature forgery and other illegal activities. It is an indispensable banking requirement; only when the customer details are verified, a loan can be applied.
Why should you file KYC?
As a customer, KYC helps to ensure that the financial services are not being misused as it confirms your authenticity.
Through KYC, the banks/online lenders get to see the transparency in your financial dealings, which in turn helps them manage their risks prudently.
KYC Documents for a Personal Loan in India
- Photo Identity Proof
- Residence Ownership Proof
- Residence Address Proof
- Job Continuity Proof
- Income Proof
- Bank Statement
- Investment Proof
- 1 passport size colour photograph
The Evolution of eKYC
Until a few years ago, applying for a personal loan was a challenge. Long bank queues, filling an endless number of documents, waiting for weeks and sometimes even months to hear a revert or status from the bank are now things of the past.
Because now, technology and digitalisation in the banking sector have made the whole process of applying for a personal loan extremely streamlined and simplified.
Paperless eKYC process has accelerated the process of loan approval and disbursal because the KYC procedure that used to take weeks, now takes just a few minutes.
What is eKYC?
eKYC (Electronic Know Your Customer) is a process of getting your KYC done online.
What are the benefits of e-KYC when applying for quick cash loans online?
- You won’t have to submit physical documents for loan approvals.
- e-KYC speeds up the personal loan and quick cash loan applications for quick disbursal of loans.
- The verification process that used to take days now takes just a few minutes. This, in turn, will help you get instant loan approvals.
- Through eKYC, you can also link your Aadhaar Card to authenticate your identity through just one ID.
Paperless e-KYC has made the personal loan application process simpler and it has also reduced the time taken to sanction a loan to just a couple of days.
MoneyTap is one of the leading online lending platforms that uses advanced technology to provide its customers with a hassle-free, automated personal loan online application and approval process.
Get instant personal loan approval of up to ₹ 5 Lakh with paperless eKYC process and minimal documentation from MoneyTap. Apply now!