KYC or Know Your Customer was introduced to counter issues of fraudulent activities and false identities and make investing in mutual funds safer. Through KYC, financial institutions can verify the identity of their customers and conduct background checks. Under the Prevention of Money Laundering Act, 2002 and Securities & Exchange Board of India guidelines, KYC check is mandatory for mutual fund investors.
Every investor’s KYC data is stored with a SEBI-registered entity called KYC Registration Agency (CVL KRA). Keep reading to learn more about how to check KYC status for mutual funds on the online portal of CVL KRA.
Most individuals and fund houses use the CVL KRA portal to check the status of an investor’s KYC. The online website of CDSL Ventures Limited (CVL) is highly accessible and user friendly, providing a convenient way to check the KRA database. All you have to do is follow these easy steps:
Step 1: Visit the official portal of CDSL Ventures Limited.
Step 2: Click on “KYC Inquiry” on the top navigation bar.
Step 3: Upon being redirected to a new page, you will see two options to check your KYC status.
Step 4: You can either fill in your ten-digit unique alphanumeric PAN.
Step 5: Alternatively, you can fill in your personal information, like name, date of birth or incorporation, and exempt category. In the last option, you can gain exemption for SIP of up to Rs. 50,000 in mutual funds.
Step 6: Lastly, you have to press “Submit” to see your status. Along with this, you can see the KYC registration date, date of modifications made (if any) and in-person verification checkbox.
Note that you can also use the official website of other KRA agencies, where you will have to undergo very similar steps. However, these processes only work when you have a PAN card.
Once you complete the above-mentioned mutual fund KYC status process, you will get to see either of the following statuses:
The Reserve Bank of India first introduced Know Your Customer in 2002 to put an end to money laundering, theft, black money and impersonation. SEBI, the securities market regulator, also issued anti-money laundering guidelines to set the norms for mutual fund KYC checks.
A primary reason for introducing Know Your Customer in the mutual fund investment process is to ensure that the deposits are going to the actual investor. Thus, it helps Asset Management Companies to distinguish between legitimate and criminal investors.
The aim is to prevent any cases of financial fraud and check the authenticity of every investment made. By verifying your PAN card details along with other proof of identity and address proof documents, AMCs can establish your genuineness. Once all your documents are in order and verified, you can immediately start investing in any mutual fund of your choice.
Upon submitting all the required documents with a processing agency, a centralised database of KRA then stores all these documents. Any fund house or mutual fund agency can then access this database to verify their investor’s identity.
On top of this, any investor who wishes to see if they are KYC compliant before going to a fund house can also access this database and check the status of his/her KYC request. This feature prevents their investment from being rejected and saves the precious time they spend at the fund house.
Fortunately, checking one’s Know Your Customer status is a one-time hassle-free process and fully digitalised. Thus, every time you go to a new fund house to invest in mutual funds, you will not have to bear the trouble of checking your KYC status repeatedly.
A mutual fund investor is mandated to submit certain key documents along with a valid Know Your Customer form. The essential documents required to complete the offline KYC process are as follows:
Note that this is a list of some mandatory documents that most intermediary agencies or AMCs will require. However, you might also be asked to produce certain additional documents.
As mentioned above, most investment processes are now taking place online. With the introduction of Aadhaar e-KYC, you will not have to face the trouble of carrying all the above-mentioned documents to a KYC verification agency.
This online process consumes less of your time and is very convenient. For paperless e-KYC on UIDAI’s online website, you will have to submit these documents:
In India, there are five authorised KYC Registration Agencies (KRAs). All of them are responsible for maintaining and holding a database in which the details of every applicant are present. Every verification agency has to follow SEBI guidelines while conducting rigorous checks and then declaring an individual as KYC compliant.
Depending on whether you applied for a KYC using your Aadhaar (online) or PAN (offline) details, you can log on to any of these five agencies’ websites and can check the status of your KYC compliance.
The five KRA agencies are as follows:
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It is crucial for Asset Management Companies to ensure that their investors are genuine and reliable. To be able to do so, it is mandatory for every fund house to conduct KYC checks.
Thus, Know Your Customer is an essential criterion that you must meet before you start investing in mutual funds. Fortunately, once you become KYC compliant, you will not have to indulge in the verification process ever again.
Ans: Unfortunately, there is no facility for obtaining an e-KYC without a PAN card. Even though the Aadhaar card is the primary document required for e-KYC, you also have to submit a self-attested image of your PAN card.
Ans: If you have already gone through the KYC verification process and completed registration, it is not necessary to have an e-KYC. However, first-time mutual fund investors looking to verify their KYC details can opt between e-KYC (Aadhaar) and KYC (PAN).
Ans: No, there are no eligibility criteria that you have to meet for KYC registration. However, there are certain documents that you need to possess. Without a PAN card and an Aadhaar card, you are not eligible to apply for KYC verification.
Ans: Yes, you can update your existing KYC details at any time. You will have to visit the official website of any KRA and log in with your credentials. Upon clicking on “Update KYC,” you can make changes and upload the new documents. You will then get a One-time Password on your registered mobile number. After entering the OTP, you can click on submit.
Ans: Video KYC is a new online method that some organisations are using to verify the identity of their users. Through a video call with a KYC officer of the organisation, you can digitally submit and verify your documents.
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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.