Know Your Customer (KYC) practices primarily help banks to:

Know Your Customer (KYC) practices are essential in the banking industry as they play a crucial role in preventing fraudulent activities. By implementing KYC protocols, banks gather detailed information about their customers, which helps them verify their identities, understand their financial behaviors, and assess risks associated with each client. With this comprehensive understanding, banks can detect suspicious behavior, such as money laundering or identity theft, and take appropriate actions to mitigate these risks.

KYC is not directly related to increasing loan limits, enhancing investment portfolios, or developing new banking products. While these aspects contribute to a bank's overall strategy and growth, KYC specifically focuses on establishing a secure and trustworthy relationship between the bank and its clients, thereby safeguarding the institution from potential fraud and financial crime. This proactive approach helps maintain the integrity and stability of the banking system as a whole.