Opening an account and passing verification
The money side is small and concrete. One pip on one standard lot of USD/INR is ₹10, so a move of 20 pips on 0.10 lots is ₹20, and that figure comes straight from the numbers, not from a promise.
Document types and the reason each one is asked for
A regulated broker in India must collect proof of identity, proof of address and proof of bank details before it can open an account. For identity, the usual documents are a passport, a driving licence, a permanent account number card or a voter identity card. For address, the broker may ask for a recent utility bill, a bank statement or a rent agreement. The list varies between brokers, so the exact set is not fixed by one rule for every firm.
The bank document is not the same as the address document. A cancelled cheque or a bank statement shows the account number and the name on the account. The broker uses it to confirm where money will be sent when the reader funds the account and where money will be returned when a withdrawal is made. If the name on the bank account does not match the name on the identity document, the broker must hold the application until the difference is explained.
Each document has a different job. The identity document answers the question of who the applicant is. The address document answers where the applicant lives. The bank document answers where money can move. A broker that skipped any one of these would not be able to meet its obligations under SEBI rules. That is why the same document is rarely accepted for two different purposes.
What makes an application sit in a queue
An application returns to the queue when a document cannot be read. A photograph that is cropped, blurred or pasted into another image fails the check. The same happens when a corner of the page is missing or when the text is too small to read. The broker cannot verify what it cannot see, so the file waits until a clear copy arrives.
A mismatch between names is the second common cause of delay. If the identity document says one name and the bank document says another, the broker must ask for an explanation. A name change after marriage, a shortened name on a bank record or a spelling difference can all trigger a hold. The application does not move forward until the reader provides the missing link between the two names.
A third cause is an expired document. A passport, a driving licence or an address proof has a date of expiry, and a broker will not accept a document that has already lapsed. The reader should check the date before uploading. If the document is close to expiry, it is better to use another one that will remain valid for longer. None of these checks are personal. They are the same for every applicant.
How verification connects to the first funded trade
Verification and funding are separate steps. The account is verified first, and only then can money be added. The broker will not accept a deposit into an unverified account because it cannot yet confirm who owns the money. Once verification is complete, the reader can fund the account using UPI or a bank transfer. The method must match the bank account that was verified.
After funding, the reader can open a position. The money side is small and concrete. One pip on one standard lot of USD/INR is ₹10. A move of 20 pips on 0.10 lots is ₹20, because ₹10 x 0.10 x 20 = ₹20. If one pip on one standard lot is ₹10, the pip value on 0.25 lots is ₹2.50, because ₹10 x 0.25 = ₹2.50. A move of 12 pips on 0.25 lots gives ₹30 before costs, because ₹2.50 x 12 = ₹30.
Those figures are arithmetic, not a forecast. The broker may round the pip value, charge a spread, a commission or a conversion fee, and the final figure on the statement can differ from the arithmetic here. Verification itself is free. Funding is where costs begin. The reader should ask the broker which charges apply before the first trade is placed.
Twenty pips on a tenth of a lot
| Step | Amount | Note |
|---|---|---|
| Instrument | USD/INR | The example pair used throughout this course |
| Reference price | 83.2500 | A round number used only to make the arithmetic visible |
| Pip value on one standard lot | ₹10 | 100,000 x 0.0001, which is the pip size for this pair |
| Position size | 0.10 lots | One tenth of a standard lot |
| Pip value at this size | ₹1 | ₹10 x 0.10 |
| Move in pips | 20 pips | The distance the price travels |
| Result before costs | ₹20 | ₹1 x 20 pips |
The broker may round the pip value, charge a spread, a commission or a conversion fee, and the final figure on the statement can differ from the arithmetic here. Verification itself is free; funding is where costs begin.
Doing it once, step by step
The reader is about to prepare and submit an account application, then wait for verification and fund the account. The steps below follow that order once.
- 01
Ask the broker which documents it accepts
The list varies between brokers, so the reader should ask before uploading anything. The broker will name the identity, address and bank documents it needs. This avoids sending a document that will not be accepted. It also gives the reader time to find a valid copy.
- 02
Check that each document is valid and readable
The reader should confirm that no document has expired. Each page must be photographed in colour with all four corners visible. The text must be sharp enough to read without zooming. A cropped or blurred image will fail the check.
- 03
Match the name across every document
The name on the identity document, the address document and the bank document should be the same. If a name has changed, the reader should ask the broker what evidence it needs. The application will be held until any mismatch is explained. This is a common reason for delay.
- 04
Upload the documents through the broker's system
The reader submits the files using the broker's own upload page. Sending documents by other means may not reach the verification team. The broker will confirm when the files are received. The reader should keep a copy of what was sent.
- 05
Wait for verification and respond to any query
Verification is free and takes as long as the broker needs to check the files. If a document is rejected, the broker will say why. The reader should send a replacement copy rather than a new application. The queue position is usually kept.
- 06
Fund the account using the verified bank method
Once verified, the reader can add money by UPI or bank transfer. The funding account must be the one that was verified. The broker may charge a conversion fee or a spread on the first trade. Those costs are separate from verification.
The mistake most people make here
The common mistake is sending a photograph of a document that is cropped, blurred or pasted into another image. The check fails, the application returns to the queue, and the reader assumes the broker is slow. Send the full page, in colour, with all four corners visible, and make sure the name matches the name on the bank account. If a document is in a different name, the application will be held until the mismatch is explained. Ask the broker which documents it accepts before uploading anything, because the list varies between brokers.Check yourself
If one pip on one standard lot of USD/INR is ₹10, what is the pip value on 0.25 lots?
₹10 x 0.25 = ₹2.50.
A move of 12 pips on 0.25 lots gives what result before costs?
₹2.50 x 12 = ₹30.
Why does a broker ask for both an identity document and a bank document?
The identity document confirms who the applicant is, and the bank document confirms where money can be sent and returned. Both are required before the account is opened.
Questions that come up next
How long does verification take once the documents are correct?
The time varies between brokers and is not fixed by a single rule. A complete and readable set of documents usually clears faster than one that has been returned once. If a document is unclear or a name does not match, the file goes back to the queue and the clock restarts. The reader can shorten the wait by sending clear copies the first time.
Can a family member's bank account be used to fund the trading account?
The bank account should be in the same name as the identity document. If the names differ, the broker must hold the application until the difference is explained. This is because money is returned to the same account when a withdrawal is made. Using another person's account creates a mismatch the broker cannot resolve on its own.
Does the broker keep copies of the documents after the account is opened?
Yes, the broker keeps the records because it must be able to show, under SEBI rules, that it checked who the applicant is. The records are held for as long as the rules require, and the exact period is set by the regulator rather than by the broker. The reader can ask the broker how long the copies are kept.
Is a permanent account number card enough on its own?
No. A permanent account number card is usually accepted as proof of identity, but it does not show where the applicant lives or where money can move. The broker still needs an address document and a bank document. Each document answers a different question, so one cannot replace the other.
What happens if a document expires after the account is opened?
The broker may ask for a fresh document when the old one lapses. An expired document is not accepted at the opening stage, and the same rule usually applies later. The reader should check the expiry date before uploading anything. If a document is close to expiry, it is better to use another one that will last longer.
Can the account be funded before verification is complete?
No. The account must be verified before money moves, because the broker has to know who it is dealing with and where the money would be returned. Funding before verification would leave the broker unable to meet its obligations. The order is always documents, then verification, then funding.
In India
- Regulator
- SEBI
- Money
- rupee, written ₹ (INR)
- Payment methods
- UPI and bank transfer
- Instrument in examples
- USD/INR, around 83.2500
- Pip value
- one pip on one standard lot of USD/INR is ₹10
The words used on this page
- verification
- The step where the broker checks the documents against the applicant. The account is not opened until this step is complete.
- proof of identity
- A document that shows who the applicant is, such as a passport or a permanent account number card. It answers one question only.
- proof of address
- A document that shows where the applicant lives, such as a recent utility bill or a bank statement. It is separate from the identity document.
- bank document
- A cancelled cheque or a bank statement that shows the account number and the name on the account. It shows where money can be sent and returned.
- mismatch
- A difference between the name on one document and the name on another. It holds the application until the difference is explained.
- queue
- The list of applications waiting for a check. A file returns to the queue when a document cannot be read or a name does not match.
What to take away
- A regulated broker must collect identity, address and bank documents before the account is opened.
- Each document answers a different question, so one cannot replace another.
- A cropped, blurred or expired document sends the file back to the queue.
- The account is verified first, and only then can it be funded.