Having a Demat account is essential to enjoy stock market returns. Without a Demat account, you cannot hold onto securities and sell them at the right time for higher returns. A trading account can facilitate share market transactions, whereas a Demat account can store securities in digital form.
You can open a Demat account in your name with the help of a registered stockbroker or Depository Participant (DP) in India. However, you must complete the Know Your Customer (KYC) verification process to open a Demat account in India. KYC update in Demat account is mandatory for all traders in the country. Read on to understand the Demat account KYC requirements and associated charges.
Understanding KYC compliance for Demat accounts in India
KYC compliance is mandatory for depository participants and individual investors in India. It is the process of verifying the identity of the person applying for a Demat account. Several documents like an Aadhar card and PAN card are submitted by the individual applying for a new Demat account. Once you submit the required documents, the depository participant or stockbroker verifies them. It is done to ensure applicants are not involved in fraudulent or illegal activities. Once everything is verified, the Demat account is activated in your name. Your identity, nationality, and other attributes are verified with the KYC process. Earlier, the KYC process was completed in person at the depository participant’s or stockbroker’s office. Currently, the KYC process is digitised, and you can open an instant Demat account in India.
Documents required for Demat account KYC verification process in India
The Securities and Exchange Board of India (SEBI) has laid rules for the Demat account KYC process. As per SEBI norms, verifying some attributes of the applicant before initiating a Demat account is compulsory. These attributes are name, address, income, contact number, email ID, and PAN (Permanent Account Number). In addition, some depository participants and stockbrokers might verify a few additional attributes before initiating a Demat account. Therefore, you might have to submit a few documents to the respective stockbroker or depository participant to confirm these attributes. Here are the documents required for the Demat account KYC verification process:
- You might be asked to submit a PAN card, Aadhar card, driving license, or passport to show proof of identity
- You will have to submit a voter ID card, ration card, lease agreement, electricity bill, or bank statement to show proof of address
- You might be asked to submit bank account statements or salary slips to show proof of income
Understanding the e-KYC process and associated charges
If you wish to open an a instant account for inversting and want to learn how to start trading in India, SEBI allows stockbrokers and depository participants to indulge in the e-KYC process. With e-KYC, you can upload the required documents on the official website of the stockbroker. The in-person verification process is completed over a video call or via a pre-recorded video. E-KYC is completed with the help of Aadhar card verification, and stockbrokers are asked to pay around Rs 20 for each e-KYC. UIDAI also applies a minimal charge of Rs 0.50 for transaction authentication.
Final words
KYC is essential for opening a new Demat account in India. You can complete the KYC update in Demat account quickly with a reliable broking firm. You can enjoy minimal brokerage and maintenance charges by opening a Demat account. So complete your Demat account KYC now!
