📚 JAIIB 2025 • PPB • Module A • Chapter 3 of 21

Operational Aspects of KYC

KYC operations: OVDs (Aadhaar, passport, voter ID, driving license — PAN is NOT OVD!), e-KYC (UIDAI), Digital KYC, V-CIP, CKYCR (CERSAI), KYC Identifier, small accounts (₹1L annual credits, ₹50K balance), beneficial owner thresholds (company 25%, partnership 15%), wire transfers (₹50K domestic).

⏱ 16 min read🎯 High Exam Weightage🧠 6 Memory Tricks⚡ 10 Flash Cards

Banky Opens His First Account! 📝

Now that you know WHY KYC matters (Chapter 2), this chapter teaches HOW to DO it. Which documents to collect, how to verify, what’s an OVD, how e-KYC works, what’s a small account, and when to do enhanced due diligence.

“Sir, a customer brought a PAN card for KYC. Is that enough? And what about someone without ANY documents?!” 📝

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Section 1 of 9

Why Read This Chapter?

Knowing KYC procedures = processing accounts correctly = avoiding compliance violations

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How do I actually DO KYC at the branch?

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Banky, KYC has clear steps: (1) Collect OVD — Aadhaar, passport, voter ID, driving license, NREGA job card, NPR letter (⚠️ PAN is NOT an OVD!). (2) Verify — check original, certify copy. (3) For no-OVD customers: open Small Account (₹1L credits, ₹10K withdrawals/month, ₹50K balance max). (4) Upload to CKYCR within 10 days. (5) Enhanced Due Diligence for PEPs, non-face-to-face, high-risk. (6) Update KYC periodically (high risk = 2 years, medium = 8, low = 10).

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Exam Marks

3-4 questions — PAN is NOT an OVD, small account limits (₹1L/₹10K/₹50K), beneficial owner 25% for company, CKYCR = CERSAI, wire transfer ₹50K, no account in benami name. Very high weightage!

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Career Growth

Every branch officer processes KYC daily — getting it right = zero audit exceptions = promotion

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Real Life

You’ll know exactly which documents your bank needs and why — no more frustration during account opening

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Section 2 of 9

How Will It Benefit You?

Real career advantages

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Give me a real scenario!

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📝 Scenario: A customer says: ‘I only have PAN card. Can you open my account?’ You explain: ‘Sir, PAN is NOT an OVD (Officially Valid Document). You need Aadhaar, passport, voter ID, driving license, NREGA job card, or NPR letter. However, if you have NO documents at all, we can open a Small Account with limits: ₹1 lakh annual credits, ₹10,000 monthly withdrawals, ₹50,000 balance. You must provide OVD within 12 months.’ Customer: ‘I’ll get my Aadhaar!’ 🌟

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Section 3 of 9

What Is This Chapter About?

30-second summary

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Quick version, sir!

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This chapter covers: Customer Acceptance: No benami/anonymous accounts. CDD mandatory before any relationship. OVDs: Aadhaar, Passport, Voter ID, Driving License, NREGA Job Card, NPR Letter. ⚠️ PAN is NOT an OVD (exam PYQ!). CDD for Individuals: OVD for identity + address. Self-certified copy + original verification. Beneficial Owner: Company (unlisted) = >25% shares (exam PYQ!). Partnership (registered) = >15% capital/profit. Trust = author + trustees + beneficiaries with ≥15%. Enhanced DD: PEPs (foreign), non-face-to-face (first payment through KYC-complied account), professional intermediary client accounts. Small Accounts (no OVD): ₹1L annual credits, ₹10K monthly withdrawals, ₹50K balance max, no foreign remittance. Provide OVD within 12 months. Alternate CDD: e-KYC (UIDAI Aadhaar biometric), Digital KYC (geo-tagged photo + live location), V-CIP (Video-based Customer Identification Process). CKYCR: Central KYC Records Registry = CERSAI. Upload within 10 days. KYC Identifier assigned. Individuals from Jan 2017, LEs from Apr 2021. Wire Transfers: Domestic ≥₹50K needs originator info. Cross-border: ALL values need originator info. Transaction Monitoring: STR decided by PO. Records: 5 years. UCIC for holistic customer view.

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Section 4 of 9

Key Definitions — Banky Asks, Mentor Explains

Every term explained like you’re 10

Critical Term

Officially Valid Documents (OVD)

6 documents accepted for KYC: Aadhaar, passport, voter ID, DL, NREGA job card, NPR letter — PAN is NOT OVD!

6 OVDs

Banky’s Understanding: 6 OVDs: (1) Aadhaar (proof of Aadhaar number), (2) Passport, (3) Voter ID, (4) Driving Licence, (5) NREGA Job Card, (6) Letter issued by NPR (National Population Register). ⚠️ PAN Card is NOT an OVD (exam PYQ!). PAN is verified separately but is not accepted as identity/address proof under KYC. For certified copies: original must be verified, self-certified copy authenticated by bank officer with ‘verified with original’.

🧒 Analogy: OVDs are like VIP passes to the banking club — only these 6 documents get you in. PAN card is like a membership card for another club — useful but won’t get you into this one!

Critical Term

Small Accounts

For people with NO OVD — ₹1L annual credits, ₹10K monthly withdrawals, ₹50K balance — provide OVD within 12 months

Financial inclusion

Banky’s Understanding: Small Accounts for financial inclusion (no OVD). Limits: (1) Annual credits ≤ ₹1 lakh. (2) Monthly withdrawals/transfers ≤ ₹10,000. (3) Balance ≤ ₹50,000 (govt grants/welfare = limit ignored). (4) No foreign remittance. Opened based on self-attested photo + address declaration. Must provide OVD within 12 months (extendable by 12 if applied for OVD). Total max: 24 months without OVD.

🧒 Analogy: Small Account = a ‘starter pack’ bank account — limited features but gets everyone into the banking system. Like a prepaid SIM with limited validity until you complete full KYC!

Critical Term

Beneficial Owner

Company (unlisted) >25% shares. Partnership >15% capital. Trust = author + trustees + ≥15% beneficiaries.

Threshold values

Banky’s Understanding: Beneficial owner thresholds: Company (unlisted): individual with >25% shares or control rights (appoint majority directors/control management) — exam PYQ! Partnership (registered): >15% capital/profit. Body of Individuals/AOP: >15% capital/profit/property. Trust (registered): author, trustees, beneficiaries with ≥15%, and any person with effective control. If no natural person found: senior managing person = beneficial owner.

🧒 Analogy: Beneficial owner = the person who REALLY controls the money, even if the account is in someone else’s name. Like finding out who really owns a company behind multiple layers!

Critical Term

CKYCR

Central KYC Records Registry = CERSAI. Upload within 10 days. KYC Identifier assigned to customer.

CERSAI

Banky’s Understanding: CKYCR = Central KYC Records Registry. Operated by CERSAI (Central Registry of Securitisation, Asset Reconstruction and Security Interest). Banks upload KYC records. Customer gets KYC Identifier (unique number). Upload within 10 days of account opening. Individuals: from Jan 2017. Legal entities: from Apr 2021. Benefit: customer submits KYC ONCE → all financial institutions access via KYC Identifier (no repeat documentation).

🧒 Analogy: CKYCR is like a centralised Aadhaar for bank documents — do KYC once, get a unique number (KYC Identifier), and use it at ANY bank without repeating the paperwork!

Critical Term

E-KYC, Digital KYC & V-CIP

e-KYC = Aadhaar biometric (UIDAI). Digital KYC = geo-tagged live photo. V-CIP = video call verification.

3 digital modes

Banky’s Understanding: e-KYC (UIDAI): Customer provides Aadhaar + biometric → verified by UIDAI’s CIDR → digitally signed demographic data returned to bank. Digital KYC: Authorised officer captures live photo of customer + geo-tagged location + OVD image. In-person but digitised. V-CIP (Video-based Customer Identification): Customer verified via video call — live photo, OVD displayed, AI-assisted liveness check. Enables remote account opening.

🧒 Analogy: e-KYC = fingerprint scan at an Aadhaar centre. Digital KYC = selfie with location at a bank branch. V-CIP = FaceTime/video call with a bank officer from your home!

Critical Term

Wire Transfer Rules

Domestic ≥₹50K needs originator info. Cross-border = ANY value needs info. Structuring below ₹50K = suspicious.

₹50K threshold

Banky’s Understanding: Domestic wire transfers: ≥₹50,000 must include originator info (name, address, account number). Cross-border: ALL values need originator info (exam PYQ — ‘any value’). Structuring: If customer intentionally splits below ₹50K to avoid reporting → identify and file STR. Records kept for 5 years. Intermediary bank must retain all originator info.

🧒 Analogy: Like a courier service — for big packages (₹50K+) you need full sender details. For international packages, you ALWAYS need sender details regardless of size. Splitting to avoid this = suspicious!

Critical Term

Customer Acceptance Policy

No benami/anonymous/fictitious accounts. CDD before any transaction. Verify PAN. Check sanctions lists.

Key rules

Banky’s Understanding: Customer Acceptance Policy must specify: (a) No anonymous/fictitious/benami accounts (exam PYQ!). (b) No account without CDD. (c) Circumstances for third-party operation specified. (d) Check RBI sanction lists. (e) Verify PAN. (f) Verify digital signatures. (g) Mandatory vs optional info specified. (h) Joint accounts: CDD for ALL holders. Should NOT deny banking to socially/financially disadvantaged.

🧒 Analogy: Like a bouncer at a club — checks ID (CDD), ensures no fake IDs (benami), verifies against banned list (sanctions), and treats everyone fairly (no discrimination)!

Critical Term

UCIC

Unique Customer Identification Code — one ID per customer across all products/services in the bank

Holistic view

Banky’s Understanding: UCIC (Unique Customer Identification Code): Unique number for each customer within a bank. Enables: identify customer, track facilities, monitor transactions holistically, better risk profiling. Avoids repeating KYC for each product. Single customer should NOT have multiple identities. Walk-in customers (prepaid instruments etc.) may not get UCIC but must be identified if frequent.

🧒 Analogy: UCIC is like your employee ID at a company — one number identifies you everywhere in the organisation, whether you’re in the cafeteria, gym, or office. One ID for everything!

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Section 5 of 9

Chapter Explained in Simple Stories

So easy even Banky’s nephew understands

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Sir, explain this like a story!

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Three bite-sized stories coming up — impossible to forget! 🚀

📝 Block 1: OVDs, Small Accounts & Beneficial Owners

6 OVDs: Aadhaar, Passport, Voter ID, DL, NREGA Job Card, NPR Letter. ⚠️ PAN is NOT an OVD! (exam PYQ).

Small Accounts (no OVD): ₹1L annual credits, ₹10K monthly withdrawals, ₹50K balance. Provide OVD within 12 months (extendable to 24).

Beneficial Owner: Company (unlisted) = >25% shares (exam PYQ!). Partnership = >15%. Trust = author + trustees + ≥15% beneficiaries.

No benami/anonymous accounts — Customer Acceptance Policy mandate.

Key Term

PAN ≠ OVD

PAN Card is NOT an Officially Valid Document for KYC! The 6 OVDs are: Aadhaar, Passport, Voter ID, Driving Licence, NREGA Job Card, NPR Letter. PAN is verified separately.

🧑‍💼 Banky: “PAN is NOT OVD, small account limits memorised, company BO = >25%! 📝”

💻 Block 2: Digital KYC, CKYCR & Wire Transfers

3 Digital Modes: e-KYC (Aadhaar biometric via UIDAI), Digital KYC (geo-tagged live photo), V-CIP (video call).

CKYCR = CERSAI. Upload KYC within 10 days. Customer gets KYC Identifier. One-time KYC → access across all FIs.

Wire Transfers: Domestic ≥₹50K needs originator info. Cross-border = ANY value (exam PYQ!). Structuring below ₹50K = suspicious → STR.

UCIC: One unique ID per customer within the bank — holistic monitoring.

Key Term

CKYCR = CERSAI

Central KYC Records Registry is operated by CERSAI. Banks upload KYC records within 10 days. Customer gets KYC Identifier — no need to repeat KYC at other banks.

🧑‍💼 Banky: “e-KYC/Digital KYC/V-CIP for digital onboarding, CKYCR = CERSAI, wire ₹50K! 💻”

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Section 6 of 9

Exam Angle — Every Testable Point

All facts, numbers, definitions JAIIB tests

✅ Must-Know Facts — Highest Probability

PAN Card is NOT an OVD — exam PYQ! (6 OVDs: Aadhaar, Passport, Voter ID, DL, NREGA, NPR)
Small accounts: ₹1L annual credits, ₹10K monthly withdrawals, ₹50K balance max, no foreign remittance
Provide OVD within 12 months for small accounts (extendable to 24 if applied)
Beneficial owner (unlisted company): individual with >25% shares — exam PYQ!
Beneficial owner (partnership): >15% capital/profit | Trust: author + trustees + ≥15% beneficiaries
No account in benami name — Customer Acceptance Policy (exam PYQ!)
Cross-border wire transfer: originator info required for ANY value — exam PYQ!
Domestic wire transfer: originator info required for ₹50,000 and above
CKYCR = CERSAI — Central KYC Records Registry | Upload within 10 days
KYC Identifier = unique number assigned by CKYCR to each customer
e-KYC: Aadhaar biometric → UIDAI CIDR → digitally signed data returned
V-CIP: Video-based Customer Identification Process — remote account opening
UCIC: Unique Customer ID per bank — holistic monitoring, no duplicate identities
PEP (Politically Exposed Person in foreign country): enhanced DD, senior-level approval
CDD for ALL joint account holders — not just the first holder
NRI KYC documents: certified by a Judge (not NRI herself or employer or any branch!)

📝 Previous Year Questions

Q: Which is NOT an OVD?

A: (a) PAN Card ✅ (PAN is not OVD!)

Q: No account opened in ___ name:

A: (c) Benami ✅

Q: Cross-border wire transfer originator info:

A: (c) Any value ✅ (all cross-border transfers)

Q: NRI KYC document certified by:

A: (d) A Judge ✅

Q: Beneficial owner for unlisted company:

A: (d) 25% ✅ (>25% shareholding)

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Section 7 of 9

Memory Tricks That STICK

Lock every fact permanently

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Too many facts! Help! 🤯

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These tricks will lock everything in forever! 🧲

🧠 Trick 1 — PAN ≠ OVD

#1 exam trap

PAN = NOT an OVD! 6 OVDs: A-P-V-D-N-N (Aadhaar, Passport, Voter, DL, NREGA, NPR)

PAN is verified separately for tax purposes but is NOT an Officially Valid Document for KYC identity/address verification.

🧠 Trick 2 — Small Account: 1-10-50

Limits

Small Account = 1-10-50! ₹1 lakh (annual credit) ₹10K (monthly withdrawal) ₹50K (max balance)

Remember 1-10-50: ₹1 lakh annual credits, ₹10,000 monthly withdrawals, ₹50,000 balance. Provide OVD within 12 months.

🧠 Trick 3 — Company BO = 25%

Beneficial owner threshold

Company (unlisted) = >25% shares Partnership = >15% capital (25 for Company, 15 for Partnership)

Beneficial owner thresholds: 25% for unlisted companies, 15% for partnerships. If no natural person found, senior manager is the BO.

🧠 Trick 4 — CKYCR = CERSAI

Central registry

CKYCR = CERSAI (Central Registry for KYC!) Upload within 10 DAYS!

CERSAI operates the Central KYC Records Registry. Banks must upload KYC records within 10 days of opening an account-based relationship.

🧠 Trick 5 — Cross-Border = ANY Value

Wire transfer rules

CROSS-BORDER = ANY value (full info!) DOMESTIC = ₹50,000 and above (International = stricter!)

Cross-border wire transfers need originator information regardless of amount. Domestic transfers need it only for ₹50,000 and above.

🧠 Trick 6 — NRI KYC = Judge

Certification

NRI KYC documents certified by: A JUDGE (not NRI herself!) (Not employer, not any branch)

NRI KYC documents must be certified by a Judge. Not self-certified by the NRI, not by the employer, and not by any bank branch.

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Section 8 of 9

Visual Summary — Chapter Map

Entire chapter in one diagram

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Section 9 of 9

Flash Revision — Last-Minute Cards

Read these 10 minutes before exam

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EXAM IN 15 MINUTES! 😰

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10 cards — read twice, you’ll get every question right! 💪

OVDs (6)

Aadhaar, Passport, Voter, DL, NREGA, NPR

PAN is NOT an OVD — #1 exam trap!

Small Account

₹1L credits | ₹10K withdrawals | ₹50K balance

No OVD needed | Provide OVD within 12 months

Beneficial Owner

Company >25% | Partnership >15%

Trust: author+trustees+≥15% beneficiaries

CKYCR

= CERSAI | Upload within 10 days | KYC Identifier

One-time KYC across all financial institutions

e-KYC

Aadhaar biometric → UIDAI CIDR → digital data

Digital KYC (geo-tag) | V-CIP (video call)

Wire Transfers

Cross-border: ANY value | Domestic: ≥₹50K

Structuring below ₹50K = suspicious → STR

No Benami

No anonymous/fictitious/benami accounts

CDD for ALL joint holders | PAN verified separately

UCIC

One unique customer ID per bank

Holistic monitoring | No duplicate identities

NRI KYC

Documents certified by a JUDGE

Not NRI herself, not employer, not any branch

PEP

Foreign politically exposed person — enhanced DD

Senior-level approval | Check public domain info

⚡ Chapter 3 Complete — Operational Aspects of KYC

6 OVDs: Aadhaar, Passport, Voter ID, DL, NREGA, NPR — PAN is NOT an OVD!
Small Account: ₹1L credits, ₹10K withdrawals, ₹50K balance | OVD within 12 months
Beneficial Owner: Company >25%, Partnership >15% | No benami accounts
CKYCR = CERSAI: upload within 10 days | KYC Identifier for all customers
Digital: e-KYC (Aadhaar), Digital KYC (geo-tag), V-CIP (video) | Wire: cross-border = any value

Banky says: “PAN≠OVD, small=1L/10K/50K, company BO=25%, CKYCR=CERSAI, cross-border=any value!” 🎉📝

You now know HOW to do KYC operationally — from document verification to digital onboarding to CKYCR. You’re ready to process accounts correctly! 💪

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