KYC is an acronym for “Know your Customer”, a term used for customer identification process. It involves making reasonable efforts to determine true identity and beneficial ownership of accounts, source of funds, the nature of customer’s business, reasonableness of operations in the account in relation to the customer’s business, etc which in turn helps the banks to manage their risks prudently. The objective of the KYC guidelines is to prevent banks being used, intentionally or unintentionally by criminal elements for money laundering.

KYC has two components – Identity and Address. While identity remains the same, the address may change and hence the banks are required to periodically update their records.

KYC is applicable to customers of the bank. For the purpose of KYC following are the ‘Customers of the bank.

• a person or entity that maintains an account and/or has a business relationship with the bank;
• one on whose behalf the account is maintained (i.e. the beneficial owner);
• beneficiaries of transactions conducted by professional intermediaries, such as Stock Brokers, Chartered Accountants, Solicitors etc. as permitted under the law, and
• any person or entity connected with a financial transaction which can pose significant reputational or other risks to the bank, say, a wire transfer or issue of a high value demand draft as a single transaction.

KYC full form is know your customer. This is the short term form that has to fill one time. According to the rules of RBI it is compulsory process to fill for any security issue for mutual funds. Simply process you have to do fill simple from and xerox of  your id and address proof.