Steps To Complete KYC For Mutual Funds
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15 September 2021KYC (Know Your Customer) for mutual funds establishes a customer’s identity and address through various government-issued identity cards. The Securities and Exchange Board of India (SEBI) has introduced a uniform KYC process for all financial institutions in India. We will explain this process in the following sections on how to do eKYC for mutual funds online. Read on!
Table of contents
What does KYC for Mutual Funds Mean?
Any financial institution needs to conduct a background check of their customers before letting them access any services. This customer identification process called a KYC is an essential part of the account opening process in India. It involves submitting ID proof, address proof, and in-person verification (IPV) to establish an investor’s identity.
The Central KYC Registry (CKYCR), a depository of KYC records owned by the Central Government, stores the KYC records of all investors in India. KYC Registration Agencies (KRA) or Asset Management Company (AMC) offices carry out KYC verification and update data to the Central database.
Also Read – IDCW Plans In Mutual Funds
Whenever investors open a mutual fund account, they have to file two types of KYC:
Uniform KYC
The basic and uniform mutual fund KYC is mandatory. This KYC is a one-time process and uses a standardised verification method. After a SEBI-registered KRA does the KYC, the basic information becomes available to all financial institutions.
Additional KYC
Financial intermediaries may ask for details about annual income, addresses and occupation, etc., for the second stage of KYC. This information is not available in the uniform KYC but is required to open an account with any financial intermediary such as stockbrokers and AMCs.
You can complete your mutual fund KYC online or offline for any financial institution.
How to register KYC for Mutual Funds Online?
Individuals can check if a financial institution already has their uniform KYC. To do this:
Step 1: Go to the AMC website or KRA website.
Step 2: Enter the PAN and click on ‘Submit’ to check your KYC compliance.
If the KYC status is ‘In Process’, ‘Verified’, or ‘New KYC Registered’, you can move on to the next part of KYC verification. In case the status shows ‘Invalid Data’ or ‘Not Registered’, you can follow the given steps:
- You can choose Aadhaar number verification if you have your mobile number linked to the Aadhaar Card for immediate processing. Otherwise, you can opt for video KYC and upload scanned images of ID and address proof. This KYC option will take a few days to process.
If your basic e-KYC for a mutual fund is completed, move on to the following steps:
- Visit the mutual fund or registrar’s website.
- Download the ‘Supplementary KYC, FATCA or CRS Self Certification Form’ (usually available in the investor services menu).
- Fill in information about the country, place of birth, income details, occupation, net worth, tax identification number, etc.
- You will need to submit the OTP received from the mobile number linked with your PAN card. Next, submit the form.
After completing the KYC process, you will receive a KYC identification number which you will need to share with your chosen investment platform.
Also Read: How To Check KYC Status For Mutual Funds?
How to Register KYC for Mutual Funds Offline?
To register your KYC physically, follow the given steps:
- Step 1: You can download the uniform KYC form from either the respective AMC’s website or the following authorized KRA websites like CDSL Ventures Ltd, NSE Data and Analytics, NSDL KRA, CAMS KRA, Karvy Data Management, etc.
- Step 2: Fill in all the details and attach self-attested copies of ID proof, address proof, PAN card, and photograph.
- Step 3: Go to the nearest AMC branch or investor service centre and submit the form along with all documents.
Documents Required for KYC for Mutual Funds
For the basic and uniform KYC verification, you will need to furnish only identity and address proof. These documents will need to be attested by an appropriate authority. For self-attested photocopies, the investor must show the original documents for verification. The documents required for KYC include:
- PAN Card – Having a PAN card with a registered mobile number is necessary.
- Identity proof – Documents admissible for proof of identity include a Voter ID card, Aadhaar card, Driving license, Passport, PAN card with photograph, etc.
- Address proof – Admissible documents include Voter ID card, Ration card, utility bills (electricity, landline telephone or gas), bank account passbook, etc.
Why is KYC for Mutual Funds Mandatory?
As per SEBI’s guidelines and Indian laws on money laundering and anti-terrorism financing, financial institutions have to carry out KYC to identify their customers. KYC compliance is mandatory in India as per the Money Laundering Act, 2002 to prevent fraud, money laundering, and other criminal activities.
This process makes sure that no investments are made from money accumulated from criminal activities. KYC also ensures that all investors provide their real names and addresses and no mistakes are made when registering for mutual funds.
Also read: Best Dividend Paying Mutual Fund: Benefits, features and taxation.
Tracking the KYC Status
You can check the status of your KYC by visiting the website of Central Depository Services Limited (CDSL) and entering your PAN. If your KYC for mutual funds is verified, you will see an ‘MF-verified’ status. Otherwise, it will show a ‘Pending’ status if the verification is not completed.
You can also go to other KRA websites and track the KYC status with the PAN.
What is the KYC Process at Navi?
To begin investing with Navi, you will need to submit your PAN and date of birth if your KYC is complete.
If KYC is not complete, here are the steps you will need to follow:
Step 1: Visit the designated page for KYC on the Navi app.
Step 2: Enter personal and employment details.
Step 3: Attach an image of the PAN card.
Step 4: Provide proof of address; it can include your driver’s license, Aadhaar, voter ID, and passport.
Step 5: Take a selfie, attach it and submit.
Step 6: Record a video reading out the OTP you will receive on your registered mobile number.
Step 7: Upload your signature digitally.
Once these steps are covered, your KYC at Navi will be complete.
*Mutual Fund investments are subject to market risks, read all scheme related documents carefully before investing.
Final Word
KYC verification is a mandatory process for any investor in mutual funds. Fortunately, it’s a one-time process, and once you are KYC compliant, you don’t have to repeat it again for subsequent investments. You can easily complete the KYC for mutual funds online and have an in-person verification done in just a few days.
FAQs on KYC for Mutual Funds
Ans: You can apply for KYC for mutual funds through the websites of fund houses or KRA. Simply fill up the details and upload self-attested copies of identity and address proof for verification.
Ans: KYC or Know Your Customer compliance is mandatory for mutual fund investments. In order to invest with any AMC (Asset Management Company), you need to ensure that you are KYC compliant with concerned mutual funds.
Ans: You can check your KYC status on the KRA (KYC Registration Agency) website. Once done, enter your PAN Card number and the Captcha code to check the KYC status of mutual funds. In case you have completed checking your KYC status without PAN, you can just enter your name, date of birth and PAN-exempt category with the Captcha code to check your KYC status for mutual funds.
Ans: KYC compliance is currently conducted without any charges.
Ans: Yes, in-person verification by the AMC or broker’s employee is mandatory. After submitting the KYC form, an authorized person will visit your residence for verification. You will need to show them the original documents for the self-attested copies submitted.
Ans: No, NRIs cannot invest in mutual funds without KYC. It is mandatory for NRIs to submit copies of passport-relevant pages to complete KYC. They must also provide current residential proof – whether it is permanent or temporary.
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