What It Means
KYC (Know Your Customer) is a regulatory identity-verification process that brokers and banks must complete before opening your trading or demat account — proving who you are, where you live, and that your funds are legitimate.
How It Works
In India, KYC typically requires PAN, Aadhaar, a bank account, and proof of address, often verified digitally through video KYC or eKYC linked to Aadhaar rather than in-person paperwork. SEBI mandates it uniformly across brokers via a centralized KYC Registration Agency (KRA) system, so once you've completed KYC with one SEBI-registered intermediary, opening an account elsewhere is usually faster since your details are already on file. KYC isn't a one-time formality either — brokers periodically ask you to re-verify or update details, and an account can get frozen for trading if your KYC status lapses or goes "on hold."
Warning
Letting your KYC details go out of date — an old address, an expired document, an unlinked mobile number — can freeze your trading account at the worst possible moment, right when you need to exit a position.