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PAN Card KYC - Significance, Verification, PAN KYC Status and More

PAN Card KYC - Significance, Verification, PAN KYC Status and More

PAN Card
Table of Contents

Most businesses today are turning to online platforms to sell their products and services. To help ease the shopping experience of customers,  they have adopted several online services for transactions.

Despite the benefits of online transactions, the number of fraudulent cases is also increasing. Banks and their online platforms frequently fall prey to hacking and financial fraud despite implementing numerous security measures. According to research conducted by the Future Crime Research Foundation (FCRF), a nonprofit incubated by IIT Kanpur, online financial fraud comprised 77.4%  of cybercrimes between January 2020 and June 2023.

This is why the government has announced that banks should acknowledge PAN card KYC to protect their customers from falling prey to online scams. In this guide, we will explore details regarding the PAN card KYC update and how it can help in seamless financial transactions. Keep scrolling through to know the details.

Reference link:

https://www.indiatoday.in/india-today-insight/story/from-the-india-today-archives-2023-online-fraud-a-raging-menace-2484367-2024-01-04

What is a PAN Card KYC?

Know Your Customer (KYC) is a process that helps verify the identities of customers. With the increase in online scams, the Reserve Bank of India introduced KYC  in 2002 to monitor fraudulent activities more effectively.  In 2004, RBI made it mandatory for banks to fully comply with KYC provisions. It has aided in enabling transparency and ensures hassle-free and seamless financial integrity.

Among various documents required for KYC, PAN Card is one of the most important documents. Issued by the Income Tax Department, this document serves as a unique identifier and is required for various financial transactions, including loan applications. Since PAN cards track essential financial activities such as salary deposits, high-value asset purchases, and more, they help verify the individual's financial history and identity.

Significance of PAN Card KYC

In India's increasingly digital landscape, PAN (Permanent Account Number) card KYC (Know Your Customer) has become a fundamental requirement. Here's why:

  1. Unique Identification

    The Government of India issues PAN cards as a unique and secure 10-digit alphanumeric identifier. Each PAN card is specific to an individual taxpayer or non-individual entity (like a business), ensuring that no two entities share the same PAN. This makes it a highly reliable tool for verifying identity.

  2. Financial Transparency

    PAN cards play a crucial role in tracking financial transactions. They are linked to significant financial activities such as salary payments and high-value purchases. This transparency is vital for tax compliance and helps prevent financial fraud.

  3. Protection Against Fraud

    Regular PAN KYC updates are essential for safeguarding against identity theft and fraudulent online activities. By verifying the authenticity of PAN card information, individuals and businesses can protect themselves from financial scams and unauthorized access to their accounts.

Documents Needed for PAN KYC

You'll need the following documents, in addition to the KYC form, to verify your identity and address for PAN KYC:

  1. Identity Proof:

    Photocopy of passport, bank statement, voter ID, PAN card, driving licence, or Aadhaar card.

  2. Address Proof:

    Driving licence, Aadhaar card, recent electricity bill, ration card, rental agreement, latest mobile or landline bill.

Using PAN Card KYC For Financial Transactions

The PAN card KYC document helps streamline the process of financial transactions. By verifying the identity and financial history of the applicants, the PAN card KYC update enables the lender to make informed lending decisions. For borrowers having validated PAN card KYC status, their loan availing chances increase, and they can secure personal loans with favourable interest rates and loan amounts. Furthermore, it facilitates faster loan approval and disbursal, making it easier for the borrower to avail themselves of the funds during the emergency.

PAN Card KYC: Easing Financial Transactions

PAN card KYC update online proves to be extremely important for financial transactions in numerous ways that are listed below:

  1. Regulatory Compliance:

    It is mandatory for financial institutions to conduct KYC verification before disbursing the loan amount. Undergoing a PAN card KYC verification process helps lenders fulfil regulatory compliances and maintain transparency in their operations.

  2. Mitigation of Risk:

    Before approving the loan request, lenders usually conduct a financial history check on the borrowers. Using the PAN KYC status, the lenders can verify the borrowers' financial status and creditworthiness, and thus reduce the risk of default and fraud.

  3. Assessment of Loan Eligibility:

    With the PAN KYC verified, lenders can easily evaluate the borrower's financial stability, repayment capacity, and credit history and calculate the borrower's eligibility for the loan amount.

Check PAN KYC Status

Now that you know how PAN card KYC helps streamline financial transactions, here is the step-by-step guide through which you can check PAN card KYC status. It can either be done via:

  1. Online mode

    Follow the below-mentioned steps for your PAN card with SEBI:

    Step 1: Visit the SEBI website and log in to your account.

    Step 2: Click on the 'Know Your Customer' section and add your PAN and Aadhaar card details.

    Step 3: Upload a self-attested copy of your Aadhaar card for verification.

    Step 4: Fill out and submit the form for PAN card KYC verification online.

    Step 5: After submitting the PAN card KYC online form, you will get a notification of One-Time Password (OTP) on your registered mobile number.

    Step 6: Enter OTP to verify the mobile device and complete the KYC process.

  2. Offline mode

    For offline PAN KYC verification, follow the steps mentioned below:

    Step 1: Obtain a physical copy of 'Know Your Customer' from the bank branch.

    Step 2: Fill the required form accurately with the relevant details.

    Step 3: For the accuracy of the provided information, sign the form in a designated place.

    Step 4: Attach a copy of PAN and address proof to complete the KYC form.

    Step 5: Attach a recent passport-size photograph.

    Step 6: Submit the form to a bank branch, where the bank staff will authenticate the information through their verification process.

Get PAN Card KYC Done Today!

Getting a PAN card KYC is extremely important to meet regulatory compliance and enhance security measures. It is a prerequisite when you want to avail yourself of the loan amount with ease. At KreditBee, we value transparency and hassle-free loan applications for new-to-credit and middle-income consumers. Therefore, we advise you to verify your PAN card KYC status.

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Frequently Asked Questions

Customer refers to any entity or individual that has an account or business relationship maintained with the bank.

Generally, PAN card KYC verification is regarded as a one-time process. Nonetheless, it's crucial to maintain up-to-date KYC information, particularly in the event of any alterations like changes in address or contact details, to uphold adherence to regulatory standards.

Absolutely, the PAN card acts as a distinctive identifier, enabling you to link numerous bank accounts to it. However, it is crucial to verify that all linked accounts adhere to KYC regulations and maintain accurate information.

The KYC registration and verification process usually takes 7 to 15 days. Whereas, KreditBee streamlines the process and helps you avoid lengthy waiting periods.





AUTHOR

KreditBee As a market leader in the Fintech industry, we strive to bring you the best information to help you manage finances better. These blogs aim to make complicated monetary matters a whole lot simpler.