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KYC for Mutual Funds

Know Your Customer (KYC) has become an important service these days. Be it opening a bank account, getting an LPG or Gas connection, using online mobile payment such as PhonePe, Paytm, etc, KYC is required everywhere. We can also say KYC to be proof of your credibility. Hence, the same is the case with KYC for Mutual Funds. You can now do your online KYC for the mutual funds within 5 minutes sitting at home.

Furthermore, KYC is a mandatory requirement to be fulfilled by all investors before making an investment. Also, mainly there are two approaches to complete the KYC procedure – Online and offline. In this article, you will get a complete guide for both the procedures, as per the latest guidelines by RBI. Let's begin!

What is KYC for Mutual Funds?

In a simple language, KYC is just another name for background checks. Moreover, it is a customer identification process mandatory for an account opening with any financial institution before an individual starts investing. Subsequently, it requires an investor to prove their identity and address through relevant documents. For example, PAN card, Aadhaar card, Passport, etc.

It is a mandatory requirement to fulfill by all the investors before starting an investment in mutual funds. Moreover, the investors are also required to complete KYC for Mutual Funds with KRA (KYC registration agency). Subsequently, once the KYC procedure is complete, it is universally applicable to all investments across all the funds.

Also, the process of KYC for Mutual Funds is mandatory as per the Money Laundering Act, 2002. A KYC process is divided into 2 parts:

Part 1 – It requires the basic KYC details of the investors. This is done as prescribed by the Central KYC Registry. It remains the same for all the registered financial institutions.

Part 2 – It requires additional information that is separately sought by different financial institutions. For example, Mutual fund agencies, banks, stockbrokers, etc. opening an investor's account.

 

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Why is KYC for Mutual Funds compulsory?

The idea behind the KYC procedure is thus to ensure the transparency of information that an investor provides to any financial institution. Also, KYC is a significant way to prevent financial crimes and fraud. Moreover, not only does it prevents frauds but also ensures the safety of investor’s assets but also helps to prevent terrorism financing, money laundering, and other schemes that can cause corruption.

Moreover, every financial institution such as banks, mutual fund companies, lenders, insurance agencies, etc) are required to do a background check (KYC) for all the customers. Also, in case a financial institution fails to comply with KYC, they have to pay heavy penalties as well as they may face legal actions.

How to do KYC for Mutual Funds?

You can thus complete a KYC procedure with any of the following SEBI registered agencies.

1. Asset Management Company or the Fund House.
2. KYC registration Agencies such as Karvy, CAMS, NSDL (National Securities Depository Limited), CDSL (Central Depository Service Limited), etc.

You have 2 ways to complete a KYC procedure – Online and Offline.

Online Video KYC

With internet facilities, online KYC for mutual funds is now a hassle-free and quicker process. Furthermore, it usually gets completed the next business day.

Here are the steps you can follow for online KYC:

  • Firstly, visit the website of any fund house (Axis, HDFC, Mirae Asset, Nippon India, etc) or download our app.
    For Android click here.
    For Apple click here.
  • Enter your details as per your Aadhaar Card
  • Enter the OTP sent to your registered mobile number.
  • For Identification proof, enter your PAN Card details and upload a photo of the PAN Card.
  • For address proof, enter the details and upload a photo of any of the documents accepted as address proof for KYC.
  • Fill in some personal information such as gender, marital status, citizenship, occupation, etc.
  • Give the declaration.
  • Upload your signatures.
  • Complete Photo and Video verification by following the instructions as mentioned.
  • Finally, submit your application.

Offline KYC

A customer can also choose to go for an offline mode to complete the KYC. However, it can take up to 7 days for the KRA or the fund house to approve your application.

Here are the steps you can follow for offline KYC:

  • Firstly, download and print the form online or visit the nearest branch or any KRA to get the form.
  • Secondly, fill in all the required details as per your Aadhaar or PAN Card.
  • Thirdly, attach the identification and address proof with your application.
  • Fourthly, visit the KRA branch and submit the application.
  • Lastly, you may need to provide your biometrics as well. Subsequently, when you submit the application, you will get an application number to check the status of your KYC.

Online Video KYC for Mutual Funds with Investify.in

You can also do an online KYC for mutual funds with us. We have made the KYC process simpler and hassle-free. All you have to do is keep your Identity Proof, Address Proof, Declaration, and e-sign ready and you can complete the KYC process in just 5 minutes by following the steps below:

  • Firstly, Click to download our Investify.in App.
  • Select the option of Digital KYC.
  • Upload the identity proof and fill in your details.
  • Upload the address proof and fill in your details.
  • Fill in some additional information.
  • Give the declaration and upload your e-signatures.
  • Record your selfie video speaking the numbers mentioned on the screen.
  • Finally, submit your application and your online KYC for the mutual fund done.

Documents required for KYC

To complete your KYC for mutual funds investments, you just need identification proof and address proof.

Documents used as identity proof:

  1.  Aadhaar Card
  2. Passport
  3. Voter’s ID Card
  4. Pan Card
  5. Driving License
  6. ID with photo issued by Central or State Govt., Regulatory Authorities, Statutory Authorities, Public Sector Undertakings, etc.

Documents used as address proof:

  1. Passport
  2. Ration Card
  3. Voter ID Card
  4. Driving License
  5. Registered Lease Agreement
  6. Passbook, landline telephone, Gas or electricity bill not more than 3-month-old.
  7. ID with photo issued by Central or State Govt., Regulatory Authorities, Statutory Authorities, Public Sector Undertakings, etc.
KYC for Mutual Funds

How to check the status of your Mutual fund KYC?

 You can easily check your KYC Status online with the steps written below:

1. Type www.cvlkra.com in your browser.

2. Enter the PAN Card Number along with the other details asked.

3. You will see the status of your KYC.

What does different KYC Status mean?

1. KYC Registered - It means you have successfully registered for your KYC with the KRA.

2. KYC Under Process - This shows that your KYC request is accepted and is being reviewed by KRA.

3. KYC On Hold - It shows that your KYC process is on hold. This is due to any discrepancy in the documents and KRA is waiting for you to re-submit the documents again.

4. KYC Rejected - It shows that your KYC is rejected by KRA after verification of PAN details with the other KRAs. It means that your PAN is already available with other KRA.

5. Not Available - It means there is no KYC record available for you with any KRAs.

Conclusion

To sum up, we can say that KYC is a mandatory step to go ahead with hassle-free investments. To get your KYC successfully done without any interruption, you need to make sure you have all the required documents ready and give accurate information.

Once your KYC is successful, you can invest with any AMC. You don’t have to repeat the process as it is universally applied to all your investments.

FAQ's regarding KYC

Q.) What is the central KYC Registry?

Ans. Central KYC Registry is a centralized regulatory established by the government to keep records of customers in the financial sector. It receives, verifies, stores and safeguard the KYC records of the clients in digital form.

Q.) Is uniform KYC mandatory?

Ans. Yes, currently it is mandatory for all prospective investors who want to open an account for mutual fund investments.

Q.) What will happen if an investor is a minor?

Ans. For minors, the parent or the legal guardian who opens the account for the minor's investment is liable to complete the KYC process.

Q.) What happens when a minor becomes major?

Ans. When a minor attains the age of 18 years, they have to complete the KYC process with their own documents and notify all concerned financial intermediaries involved in the investments.

 

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Online KYC for Mutual Funds
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