A trader cannot wish to enjoy the benefits and perks of investing in the Indian stock market without opening the Demat and trading accounts. The significance of both these accounts goes beyond what the general people realise until they enter the market. The link of a savings account, trading account and a Demat account can create a chain of the most convenient trading process available. It has been over two decades since the NSDL (National Securities Depository Limited) realised the need for storing the share certificates in the Demat form. But the budding traders in the industry are still learning about the nitty-gritty of the account, given myths and rumours about this one never die!
Therefore, for a trader to make the most of his online Demat Account, he should complete the account opening process correctly. Some of the investors are suspicious about the need for doing KYC (Know Your Customer) verification formality. Well, the importance of this verification is quite significant in the industry. Therefore, to complete this method quickly through the best platform, open IIFL account online. Let us first understand the need for KYC while opening the online Demat Account.
What Is KYC Verification?
KYC (Know Your Customer) is a verification process that every financial institution or organisation dealing with trade and commerce is liable to conduct. This process helps the concerned authorities to check the authenticity of the customers or the applicants who are trying to avail any kind of financial service. There are two types of KYC verification process:
In-person Verification: This one is the most commonly used method where the authorities ask the investors or traders to visit their office for a face-to-face verification round. They may take their fingerprints, retinal scans, and pictures, etc. to match the details with the provided documents.
Aadhar Card verification: In this process, the authorities or DPs match the details of a trader’s Aadhar card with his other documents. This process can be easily conducted online without any additional efforts from the traders’ side.
Why Is It Important For Opening Demat Accounts Online?
As per the regulation of the RBI (Reserve Bank of India), every government or private entity is liable to conduct the KYC verification process for opening bank accounts, online Demat Account, and any other form of financial service. If any organisation fails to produce the documents that support their conduct, their claims on the case of online fraud or money laundering will not get much significance. Therefore, every financial entity is bound to conduct this process.
- The KYC process allows the financial bodies to avoid the cases of money laundering or fraud from the people as there have been many such incidents in the past.
- The authenticity and honesty of a trader willing to open the online Demat Account are very important for the Depository Participant. Therefore, he needs to verify the address, facial appearance, fingerprints, etc.
- There have been many cases in the past where some people used the documents of dead individuals to get access to their trading or bank accounts. Although the online Demat Account diminishes such possibilities, it is always crucial to cross-verify the information.
- The KYC details are common to all banks, financial institutions and Depository Participants. So, it becomes easier for them to create a chain of financial engagements that are in the name of the same person.
Steps To Complete KYC Verification Online
There are a few simple steps involved in the KYC verification process for opening an online Demat Account. There was a time when traders had to visit the Depository Participant’s office to complete the In-person verification process. However, now most of the leading DPs accept online verification processes.
- Scan all the required documents and submit it with the online application of opening the Demat Account. Make sure the scan copies are clear and prominent.
- Once the documents are accepted, the traders get a call from the DP executive who briefs about the verification process.
- For those who have laptops, you can complete the process using their software or a mere video call. In the case of traders who use their computers, they must install a webcam before availing this service.
- DO as instructed in the verification process that will take a few minutes. Make sure that there is a stable internet connection.
- Once the executive verifies the digital fingerprints and goes through the online in-person verification process, he will grant the application. The traders get their account number within 48 working hours.
There was a time when traders had to photocopy every document, go to the Depository Participant, sit in a queue to submit them for opening the Demat Account. Thanks to the era of the internet, now everything is possible online. All one has to do is rely upon trusted names and to get the job done! Open an online Demat Account within 38 working hours after completing the verification process.