1. What is KYC?
The objective of know your customer guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering activities. Know your customer procedures also enable banks to know/understand their customers and their financial dealings better which in turn help them manage their risks prudently.
2. Why KYC?
KYC norms were introduced in 2002 by Reserve Bank of India with the purpose to prevent money laundering, terrorist financing, theft and so on.