It will be the turn of companies and professional auditors next to submit their KYC details as part of an exercise to be undertaken by the Ministry of Corporate Affairs.
Know Your Customer or KYC in short is not uncommon as it is being insisted upon by a number of service providers such as those into banking and financial services, telecom firms and LPG distribution.
Like in such instances, the idea behind introducing KYC process for all companies and professional auditors remains the same – to know them better. The objectives that will be served with the information, however, could be of more significance.
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“We have completed KYC of directors [in companies]. Now we are going for KYC for companies and professional auditors,” said a senior official in the know about the proposed exercise to be implemented by the Registrar of Companies (RoC).
There is no mechanism or system at present that captures all the information about the companies. The effort thus is an attempt to collect information and create a database for analysis from different perspectives.
The process of KYC submission, which begins on April 1, will come close on the heels of an intensified action by the RoC in Hyderabad to track and clamp down on shell companies. In addition to this, several thousand companies have been struck off from the register for various violations.
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The KYC for companies wouldlead to co-relation of data sets provided with other information available.
The proposed stipulation for professional auditors such as chartered accountants, company secretaries and cost accountants is also to ensure that they confine themselves to the number of companies they are eligible to provide service for.