Question

KYC compliance is done:

• A. to identify a person
• B. to know the address of a person
• C. to ensure the genuineness of the person’s identity as mentioned in the application and to verify
• D. as per the rules of state government

Hint:

Remember: KYC = Know Your Customer — it ensures the person’s identity is genuine and verified.

Answer 1

The Correct Option is C

KYC stands for Know Your Customer and is a mandatory process used by banks and other financial institutions to verify the identity and address of their clients.
The primary objective of KYC is to ensure that the customer is genuinely who they claim to be.
It helps banks prevent fraudulent activities, money laundering, and illegal transactions by verifying documents like ID proofs, address proofs, and other credentials.
While identifying a person and knowing their address are parts of the KYC process, the main goal is broader — it is to confirm the genuineness and authenticity of the customer’s identity as declared in the application.
Banks must comply with regulatory guidelines set by the Reserve Bank of India (RBI), not state governments, for KYC norms.
Therefore, option (C) correctly captures the full purpose of KYC compliance.