This is Part 2 of Money Basics for Indians, our 12-part series on the everyday money systems every Indian should understand. New here? Start with Part 1: Bank Accounts and Deposit Insurance.
Know Your Customer (KYC) is how banks, brokers, mutual funds and insurers confirm who you are. It sounds like paperwork, but it decides whether your money can move freely, and whether your family can claim it easily if something happens to you.
The two key documents
- PAN (Permanent Account Number): Your tax identity. Required for opening bank accounts, investing, large transactions and filing tax returns.
- Aadhaar: Your identity and address proof, used for e-KYC through OTP or biometrics.
Link PAN with Aadhaar
PAN must be linked with Aadhaar. If it is not, your PAN can become inoperative. That can mean higher TDS on your income, no tax refunds, and trouble with banking and investing. You can check the link status, and link it after paying a fee, on the Income Tax e-filing portal.
CKYC: do it once
The Central KYC (CKYC) registry stores your KYC record and gives you a 14-digit CKYC number. Once your KYC is in the registry, other financial institutions can fetch it instead of asking for fresh documents every time.
Re-KYC
Banks periodically ask customers to update KYC, more often for higher-risk accounts. Respond only through your bank's official app, website or branch. Messages saying "your account will be blocked today, update KYC via this link" are a classic scam. See Part 11: Financial Scams and Digital Arrest.
Nominees: now up to four
A nominee is the person who receives the money if the account holder dies. Since 1 November 2025, bank customers can name up to four nominees for deposit accounts and for lockers or safe-custody items.
- Simultaneous nomination: Split the money among nominees in percentages that add up to 100 percent. This applies to deposits.
- Successive nomination: The next nominee in line receives the money only if the earlier one has died. This is used for lockers.
Your nominee checklist
- Check nominees on every bank account, FD, demat account, mutual fund folio, insurance policy and EPF account.
- Update them after marriage, the birth of a child or a death in the family.
- Tell your nominees where your accounts are.
Remember that a nominee is a custodian who receives the money; your will decides who finally inherits it. Read wills and estate planning basics.
This article is for general information and education only. It is not financial, tax or legal advice. Rules, rates and limits change often, so check official sources such as the RBI, the Income Tax Department or India Post, or speak to a qualified adviser, before acting.
Next in the series: Part 3: Your Credit Score.
