What is KYC? How to do KYC for Mutual Fund Investments?

How to do KYC for Mutual Fund Investments
How to do KYC for Mutual Fund Investments
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Investors should be KYC compliant to become eligible for mutual fund investment. How to do KYC for Mutual Fund Investments is a matter of concern for many investors willing to start the investment. KYC is a first and mandatory process for mutual fund investments.
It is applicable for all Mutual Fund investments if once completed by the investor.
The KYC process can be conducted online or offline. Online KYC is called eKYC and offline called Physical KYC. SEBI registered KRAs (KYC Registration Agency) like CAMS, Karvy, NSDL maintain all KYC records of the customers.
Here, we are listing some specific queries related to How to do KYC. This may help investors to understand the process of KYC and Getting them started.

What is KYC? 

KYC stands for “Know Your Customer”. The Reserve Bank of India has made it mandatory for banks, financial institutions including Mutual Funds and other organizations to verify identity and address of all customers who carry out financial transactions with them. KYC is a process through which an institution verifies the identity and address of an individual. A customer has to submit his KYC before he starts investing in various instruments such as mutual funds, fixed deposits, bank accounts, etc. But an individual has to do it only once when he starts investing for the first time.

Why investors need to be KYC complaint? 

The main aim of KYC is to make sure that capital markets are safe from money laundering and fraudulent financial activities. It is a process to ensure the authenticity of the investor to prevent any unforeseen circumstances in future. All the necessary details of investor kept in a safe database. This database is accessible by the fund houses and intermediaries.

KYC helps the intermediaries to make the investment process smooth as well as understand the clients.

Who all should complete the KYC Process? 

  • Existing mutual fund investor as well as investor proposing investment in mutual funds should get their KYC process completed.
  • If applicant for mutual fund investment is a minor, the designated guardian of the minor has to be KYC compliant
  • All applicants of a joint investment should be KYC compliant.
  • If investment made through a Power of Attorney, Power of Attorney holder is also required to complete the KYC process.

What to do when minor attains the majority? 

If applicant for mutual fund investment is a minor, the designated guardian of the minor has to be KYC compliant. How to do KYCfor Mutual Fund Investmentswhen that minor attains the age of 18 and becomes major? A minor should get the KYC process done when he/she attains the age of 18. They need to submit the KYC Acknowledgement, bank details and other required documents to the mutual fund. This will make the person authorized to handle the investment on their own.

Where can I get my KYC done? 

The KYC process can be carried out online as well as offline at any of the SEBI registered KRA (KYC Registration Agency) or AMC offices of the mutual fund houses.

KYC Registration Agency (KRA) are CAMS, Karvy, CSDL (Central Depository Services Limited) Ventures, NSDL (National Securities Depository Limited) and NSE-owned (National Stock Exchange) DotEx International Limited.

Does the investor have to repeat the KYC process with every Mutual Fund? 

KYC is a onetime process. If completed in all respects, the investor has to produce a copy of the acknowledgement to the mutual fund where the investor desires to invest. It is applicable for all the mutual fund houses. There is no need to repeat the KYC individually for every mutual fund.

How to do KYC for Mutual Fund Investments process online? 

KYC can be completed on websites of most of the Mutual funds. But before clicking on the website, one should be ready with the following self attested documents –

  • Image of Pan
  • Image of address proof (Aadhar / Voter ID/ Passport etc),
  • Image of sign and
  • Image of cancelled cheque.

Follow the given steps-

Step 1

Log on to the website of any KYC Registered Agency and create an account

Fill online form including details of your pan, your registered mobile number, identity and address proof document, and bank details

Step 2

Upload self attested documents as mentioned in the KYC form

Step 3

Complete the in person verification through video call or by visiting KRAs office in person. IPV KYC is done through video call also where you have to display the original identity and address proof during the video call.

How to do KYC for Mutual Fund Investments process offline? 

You can get the KYC done offline also. You can download the forms from the following link: https://www.amfiindia.com/know-your-customer

Please fill up the downloaded form, attach following documents with it and submit to the office of AMC or RTA –

  • Latest photo
  • Copy of Pan card
  • Copy of address proof
  • All these documents should be self attested.

Follow the given steps- 

Step 1

  • Download and fill the KYC form. Mention your identity and address details
  • Attach the proof of identity and proof of address with the application

Step 2

  • Visit a KRA office and submit the application. Complete the Verification/ biometrics as well when required.
  • After completing the process KYC acknowledgement will beissued to the customer.

How to do KYC for Mutual Fund Investments process online through Aadhaar-based? 

Aadhaar-based KYC allowed only for the investment of maximum Rs. 50,000 in a year. You can get it done through the website of KRA or fund house.

If investor is willing to invest more than Rs 50000 in a specific fund per year, they have to get In-Person-Verification done. The investor can either visit a fund house office or KYC kiosk for in-person verification or authenticate using Aadhaar-biometrics by calling the KRA (KYC Registration Agency) executive to their residence.

Many mutual fund houses offer facility to the customers to get their IPV KYC done through video call also where they have to display their original identity and address proof. After completing this process, the investor can invest any amount in the mutual fund scheme.

Check your KYC status Online 

How can I check my KYC status online?

You can check your KYC status online through visiting website of CDSL (Central Depository Services Limited). Enter your PAN in the appropriate place. It will show the KYC status that you are KYC compliant or not.

How long the KYC remains valid? 

People often have confusion that renewal of KYC is also required after certain years as they renew their passport and many other documents. It is not required. Once they become the KYC complaint and KYC Acknowledgement obtained, no renewal required until any procedural change made by the regulating authorities. It will remain registered in investor folio and quoted in all future processing related to mutual fund investments.

They can update their KYC in case of any change in vital credentials like change in address, name etc. by completing the prescribed process for this purpose.

Bottom Line: 

KYC process has evolved a system for proper verification, authentication, maintenance and preservation of identity and address of mutual fund investors. It allows fund houses easy and quick retrieval of investor data whenever required or requested by the competent authorities. It ensures that the investments are made in the name of a real person with real names and details to prevent any unforeseen circumstances in future. This is a process to keep the mutual fund industry safe from fraudulent investments.

Regulatory authorities and fund houses have made this process very smooth and investor friendly. Every mutual fund investor needs to complete the KYC process carefully.

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