KYC, Video KYC, and CKYC: Digital Onboarding Explained
KYC, or Know Your Customer, is the process banks, NBFCs, and Payment Aggregators use to verify who a customer is before opening an account or enabling payments. Video KYC lets that verification happen remotely through a live video interaction instead of an in-person branch visit. CKYC is a shared central registry that lets a KYC record done once be reused across institutions, reducing repeat paperwork for the same customer.
What Is KYC and Why Is It Required?
KYC, or Know Your Customer, is the process a bank, NBFC, or Payment Aggregator uses to verify a customer's identity before opening an account, issuing a card, or enabling them to accept or send payments. At its core, it means confirming that a customer is who they claim to be, using verified identity and address documentation.
Regulators require KYC because it underpins several things at once: preventing financial fraud, supporting anti-money-laundering efforts, and giving institutions enough verified information about a customer to assess and manage risk responsibly. For Payment Aggregators specifically, KYC extends to the merchants they onboard, not just individual end customers.
From Paper to Digital: The Shift to e-KYC
Traditional KYC meant a customer physically visiting a branch or agent with original identity documents, which were manually verified and filed. This worked, but it was slow, inconvenient, and hard to scale for institutions trying to onboard customers digitally at volume.
e-KYC, or electronic KYC, emerged to solve this: digitizing document capture, using online identity verification services, and, where permitted, using digital identity infrastructure to confirm a customer's details without a branch visit. This shift is what made fully digital account opening and app-based onboarding practically possible.
What Is Video KYC (V-CIP)?
Video KYC, often referred to as V-CIP, or video-based customer identification process, is a way of completing identity verification remotely through a live video interaction rather than in person. In general terms, it typically combines a few elements: a liveness or face-match check confirming a real person is present rather than a photo or recording, verification of an identity document against the person on the call, and geotagging to record the location of the interaction, all reviewed and confirmed by an authorized official on the institution's side.
The specific steps, required checks, and technical parameters for Video KYC are set and periodically updated by regulators, and can vary depending on the type of institution and product involved. This article describes the general concept rather than a fixed checklist, since the exact requirements should always be confirmed against current regulatory guidance.
What Is CKYC (Central KYC Registry)?
CKYC, the Central KYC Registry, is a shared infrastructure that stores a customer's KYC records centrally so that once a customer has completed KYC with one financial institution, other institutions can retrieve and reuse that verified record rather than asking the customer to repeat the same document submission and verification process from scratch.
For customers, this means less repeat paperwork when opening accounts or products across different banks, NBFCs, or financial institutions. For institutions, it means faster onboarding for customers who already have a CKYC record, while still retaining their own responsibility to assess whether that existing record is sufficient and current for the specific product being offered.
How These Fit Together in a Real Onboarding Flow
In practice, a typical digital onboarding flow layers these pieces together. A customer might start by consenting to a digital identity or document check, which pre-fills basic identity information. The institution then checks whether a valid CKYC record already exists for that customer: if so, onboarding can move faster; if not, fresh KYC is required. Where full in-person verification is not happening, Video KYC often serves as the step that satisfies identity verification requirements remotely, with the resulting record eventually feeding back into the CKYC system for future reuse.
For Payment Aggregators, this same logic extends to merchant onboarding, verifying business identity, ownership, and banking details, though the exact scope of checks required for merchants differs from what is required for individual customers.
Supporting Building Blocks: Aadhaar, DigiLocker, and PAN Verification APIs
Several pieces of digital infrastructure act as building blocks that make e-KYC and Video KYC practical in India. Aadhaar-based verification, where used with appropriate consent and authorization, can help confirm identity details electronically. DigiLocker allows customers to fetch and share government-issued documents digitally instead of uploading scanned copies. PAN verification APIs let institutions confirm a Permanent Account Number against official records as part of identity and tax-compliance checks.
None of these building blocks are KYC by themselves. They are supporting tools that, combined with an institution's own verification process and record-keeping, help complete a compliant KYC flow more quickly and with less manual document handling.
A note on regulation. This article describes KYC, Video KYC, and CKYC in general, conceptual terms. Specific regulatory parameters, such as which checks are mandatory, how records must be retained, and how Video KYC must be conducted, are set by regulators such as the RBI and are periodically revised. Always confirm current requirements with qualified legal or compliance counsel before designing or relying on a specific onboarding flow.
Frequently Asked Questions
Is Video KYC mandatory for every financial product?
No. Requirements depend on the type of institution, the product, and current regulatory guidelines, and they can differ for individual customers versus business or merchant onboarding. Some products may permit other verification methods, while others may require Video KYC or in-person verification. Always check the current, product-specific requirement rather than assuming one approach applies everywhere.
Does CKYC replace the need for Video KYC?
No, they solve different problems. CKYC is a registry for reusing a KYC record that has already been completed; it does not perform identity verification itself. Video KYC, or another approved verification method, is generally still how the underlying KYC record gets created in the first place, before it can be shared through CKYC.
What role does Aadhaar play in digital KYC?
Aadhaar-based verification can be one method used, with appropriate consent and authorization, to confirm a customer's identity details electronically as part of a broader KYC process. It is one supporting tool among several, and its specific use is governed by current regulations and consent frameworks rather than being a universal requirement for every institution or product.
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