How to do eKYC for Mutual Fund Investments 2022 – eKYC Process Simplified
KYC: The first step to mutual fund investing
The first step is to become Know Your Customer (KYC) compliant to start your mutual fund investment journey. Once you complete your KYC, you can invest in any scheme of any mutual fund house. This article will help you understand how to do eKYC for mutual fund investments.
What is KYC?
The Know Your Customer (KYC) is a process through which a mutual fund identifies you as their customer in their record. For KYC identification, a customer needs to submit the following documents:
- Photo identity proof
- Address proof
- Cancelled cheque
Documents that can be submitted as photo identity proof
Some of the documents that can be submitted as photo identity proof include:
- PAN card (Please note that PAN is compulsory for financial transactions above a certain amount)
- Aadhar card
- Voter ID card
- Driving license etc.
Documents that can be submitted as address proof
Some of the documents that can be submitted as address proof include:
- Aadhar card
- Electricity bill
- Landline telephone bill
- Bank passbook
- Ration card
- Driving license etc.
The documents list mentioned above is not an exhaustive list of documents that can be submitted for KYC purposes. The Government may add or remove documents that can be accepted for KYC purposes. Please note that the electricity bill, landline phone bill, etc., should not be more than three months old as on the date of submission as address proof.
From the documents list mentioned above, some documents such as the Aadhaar card, passport, voter ID card, driving licence, etc., can be used as identity proof and address proof.
Bank details required for KYC
A customer needs to submit a copy of a cancelled cheque. The bank account details will be used for making investments and crediting the redemption proceeds.
Earlier, a customer was required to submit KYC documents with every financial institution to avail of financial services. But, in the last few years, the Government has introduced a central KYC wherein you need to do your KYC with designated authorities only once. The customer can then use the same KYC record for availing various financial services with brokers, depository participants (DPs), mutual funds, banks, non-banking financial companies (NBFCs), insurance companies, etc.
The Government has appointed KYC Rating Agencies (KRAs) to do central KYC. Once you do your KYC with a registered KRA, the fund house will access your KYC details from the KRA and proceed with your mutual fund investments. Some of the KRAs registered with SEBI include:
- CAMS Investor Services Private Limited
- CDSL Ventures Limited (CVL)
- DotEx International Limited (DOTEX)
- Karvy Data Management Services Limited
- NSDL Database Management Limited (NDML)
The need for KYC
The Government has mandated the Know Your Customer (KYC) process for financial transactions under the provisions of the Prevention of Money Laundering Act (PMLA). The Act has provisions to prevent money laundering activities and combat the financing of terrorism. Financial institutions like mutual funds have to maintain the KYC records (physical or digital) submitted by their customers. They need to update their KYC records from time to time by asking their customers to fill the KYC form and re-submit the KYC documents along with the form.
Aadhaar based eKYC
The Government has also allowed eKYC for new customers to start with. To do your eKYC for mutual fund, you need to submit your photograph, PAN card, Aadhaar card, and bank account details. Once these details are verified through a one-time password (OTP), the KYC process gets completed, and you can start investing.
How to check KYC status for Aadhaar eKYC?
You can check your KYC status by visiting the Asset Management Company (AMC) website. You need to key in your PAN number and submit it. The system will check your KYC compliance status and display a message accordingly. If your PAN card is KYC compliant, you will be given an option to proceed ahead with your investment. If your PAN card is not KYC compliant, you will be given an option to complete your e KYC for mutual fund before you can proceed to make your investments.
Advantages of Aadhaar eKYC
Due to the current Covid situation and resultant travel restrictions, many people cannot visit the AMC office to complete the KYC. Under such circumstances, an individual can complete their eKYC from the comfort of their home. Also, an individual needs to do eKYC only once, post which they can invest in any mutual fund scheme with any AMC.
How to get investment-ready with the Glide Invest App
When you start investing in mutual fund schemes through the Glide Invest App, you need to go through a one-time 5 step process and some other details as follows:
Compliance check: You need to enter your PAN number and date of birth. Based on your PAN details, the system will KYC compliance and display the status.
Bank account details: You need to enter your bank account details like IFSC code, account number, account type. The system will verify the account number, and Re. 1 will be credited to your bank account through IMPS.
Nominee details: You need to enter the nominee’s name, date of birth, relation with the nominee, and whether the nominee is a minor.
FATCA declaration: You need to make a FATCA declaration by answering 3 Yes/No questions, which include: Are you a resident of any other country? Are you a Politically Exposed Person? Are you related to a Politically Exposed Person?
- Signature upload: You need to sign on a blank piece of paper, take a clear picture of the signature and upload it.
Once you complete the above one-time process, you are ready to invest in your financial goals and accomplish them. To start investing in mutual fund schemes as per your appropriate asset allocation, download the Glide Invest App from Google Play Store or Apple App Store and get started.