What is Mutual Fund KYC?
KYC is a mandatory process to verify the identity of a mutual fund investor. As per the SEBI guidelines This process includes providing personal details such as name, address, PAN card details, and providing supporting documents for the same. For the customer identification process, you will be asked to furnish your identification details, address proof, and other identification documents to authenticate your identity. This can be done by providing relevant and original documents like PAN card, Aadhar Card, etc.
Importance of Mutual Fund KYC
You must be KYC compliant if you are willing to invest in mutual funds. The Securities and Exchange Board of India (SEBI) has prescribed the financial institutions and intermediaries a set of requirements under the Prevention of Money Laundering Act (PMLA), 2002, to know and verify customers.
As per the SEBI and PMLA guidelines, it is mandatory for the intermediaries and mutual fund houses to perform due diligence on investors by collecting their original documents, photograph, and in-person verification. Also, PAN is a mandatory document for making investments. Investors who do not provide PAN card will be unable to complete their KYC process. In other words, they cannot purchase a mutual fund SIP or lumpsum without completing the KYC procedure. Furthermore, non-completion of the KYC process and non-updation of PAN will restrict future transactions, including withdrawals, switches, redemption, etc.
Therefore, the KYC process ensures that every investor provides their real name and details to prevent unforeseen circumstances. Also, these documents are required to establish authenticity, and there is no history of defaults.
Documents Required for Mutual Fund KYC
The authenticity of the KYC is established through your name, photograph, resident address and income proof. The following are the documents required for mutual fund KYC for the same –
- ID Proof – PAN Card is compulsory for mutual fund KYC.
- Address Proof – any document like an Aadhaar card, passport, driving license, voter ID card, bank statement, or utility bills like telephone, electricity, or gas bill should not be more than three months old.
- One passport-size photograph
Ways to do Online KYC for Mutual Funds?
There are two ways to do online KYC for mutual funds –
How to Do KYC for Mutual Funds With KRA Online
For the online process of KYC, you have to do it through the intermediary or the mutual fund house through which you plan to invest.
The only difference between online and offline KYC is that you must fill out the form online and upload the documents. It saves time from physically going to the office and completing the authentication. The following are steps to complete the KYC process online with KRA –
- Firstly, log in to the website of any KYC Registered Agency like NDML, CAMS, Karvy, or NSE.
- Create an account and fill in the details correctly online.
- Provide your registered mobile number, PAN card, and other identification details as required.
- Upload a self-attested copy of all documents.
- The fund house or executive will record the audio video and capture your photograph to complete the online KYC for mutual funds.
After completing the KYC process online, you will receive a KYC identification number which you can share with the mutual fund house or intermediary you wish to invest through.
How to Do Aadhar Based KYC for Mutual Funds Online
Many investors prefer doing the Aadhar-based KYC. Also, many investment platforms and fund houses offer Aadhar-based KYC systems. You can complete this process online, but it has an investment limit of INR 50,000 p.a.
However, in the Aadhar-based biometric authentication, after completing the online KYC registration, an executive from the fund house will visit your home to verify your documents and take your biometrics. After the authentication is complete, the application is submitted, and KYC is processed.
Ways to do Offline KYC for Mutual Funds?
There are two ways to do offline KYC for mutual funds –
How to do KYC for Mutual Funds With KRA Offline
CDSL Ventures is the authorized body to do KYC for mutual funds. CVL takes care of the ‘customer profiling and record keeping’ for completing KYC norms. The following are the steps to complete the KYC process offline with KRA –
- Firstly, download the KYC form from the CDSL website.
- Fill in the details in the form and attach the self-attested copy of your PAN card, address proof and a passport-size photograph.
- Submit all these documents and the KYC application form to the KRA visiting their office.
- After submitting the form, you will receive an application number where you can check your KYC status.
How to do KYC for Mutual Fund with Broker/Intermediary Offline
If you wish to invest with a particular mutual fund house or intermediary/broker, they will provide the KYC registration form if you are not a KYC complaint.
The fund house or the intermediary is already registered with KRA – KYC Registration Agency.
After you fill and submit the form, your PAN number will be created and registered with the KRA, and you will be KYC compliant to process your investments.
How to Check KYC Status Online?
The following are the steps to check the KYC status online –
- Firstly, visit cvlkra website.
- Enter the PAN number and captcha code and click on ‘submit’.
- Now the KYC status will appear on the screen.
Frequently Asked Questions
KYC (Know Your Customer) is a regulatory requirement by SEBI. This is meant to control fraud and illegal activities and thereby protect your money.
Under this process, you need to provide certain information that is recorded at one place and used by all the mutual funds. You need to do KYC only once.
Complying with the KYC norms is mandatory for every investor. AMC’s (Asset Management Companies) are required to formulate rules and implement a customer identification program in accordance with the Prevention of Money laundering Act, 2002 (PMLA). These rules and regulation gets updated and is issued by SEBI from time to time. The KYC process is free for the investors.
You cannot proceed with your investment if you don’t complete KYC for mutual funds.
As per RBI, it is compulsory to do KYC for mutual funds to safeguard against money laundering and fraud. This ensures that investors are using their real identities and can be tracked in case of default. Therefore, you need to complete your KYC to invest in mutual funds.
Yes, you can update your KYC details for mutual funds anytime by visiting the nearest mutual fund branch or RTA or through online mode.
No, there is no fee for KYC in mutual funds. It is a free process.
Once you have created your Scripbox account with Resident status as Non Resident Indian and entered your current foreign mobile number with the country code, request you to contact us at email@example.com / +91 9243-200-042 / chat and we will help you with the account activation process.
If your KYC is already registered:
You don’t have to do it again. You can start investing immediately (unless there is change required to your KYC).
If your KYC is not registered, we will need certain set of documents to process your KYC:
In case your investment is in-progress and your KYC is not registered, then you have to complete the KYC registration process immediately or else the investment will be rejected.
Investment made before 12:45 PM on a working day then the KYC registration process has to be completed by 12:45 PM of the next working day. Investment made after 12:45 PM on a working day then the KYC registration process has to be completed by 12:45 PM of the next working day from the investment date (within 2 working days).