Do you want to put your trading skills to the test in India? What’s the better option to dive into the Indian stock market and invest in publicly-traded securities? However, you will need a few things to start investing in the Indian stock market. A demat account India is among the first few things you need to start trading. Unless you are thinking of storing physical certificates of securities, a Demat account is a must. Before you decide to open a Demat account, you must understand the KYC (Know Your Customer) process. Continue reading to know the step-by-step instructions for completing the KYC process for Demat accounts.
Understanding how dematerialisation accounts work
Before knowing the KYC process, you must understand what is demat account. As per SEBI (Securities and Exchange Board of India), a Demat account is compulsory for holding securities. You can buy securities via a trading account but cannot store them electronically. To hold stocks, bonds, derivatives, and other securities in digital format, you need a Demat account. Without a Demat account, you might have to store physical certificates of financial securities bought via public stock exchanges. When financial securities are converted into digital form, you don’t have the risk of theft, damage, or misplacement. They will be stored safely within your Demat account linked with a trading account.
To open a Demat account, you must find a stockbroker or a depository participant. There is a minute difference between a depository participant and a stockbroker in India. A stockbroker helps you open a new Demat account, along with a trading account. On the other hand, a depository participant can help you only open a new dematerialisation account. You need a trading account with a Demat account, as you cannot buy all the securities with a Demat account only. Securities listed on the stock exchanges are only bought via a trading account. When you decide to open a Demat account, the stockbroker or depository participant will ask for the KYC process.
Understanding the KYC process for a Demat account
The KYC process is mandatory for all stockbrokers and depository participants. It helps Demat account providers to collect information related to traders. Stockbrokers and depository participants can verify the identity of a trader with the help of KYC traders. Here is the step-by-step process to complete the KYC verification for a Demat account:
- Enter your PAN card details online and upload a digital copy
- Provide your bank account details to the provider
- Provide Aadhar card details online and verify the linked mobile number
- Upload a digital selfie
- Upload your signature
Besides the above processes, the Demat account provider might ask for a few other documents. Also, you might be called for in-person verification before getting an active Demat account.
Conclusion
The KYC process is compulsory for opening a new dematerialisation account in India. For the KYC process, you must upload a few documents and offer authentic details. You must check for the documents required for demat account before making a decision. Complete the KYC now to open a Demat account!
