Unable to view the different offers and schemes related to mutual funds? Quite possible & understood because now KYC is mandatory to have access to such offers. For every business, it is very important to have at least the valid identity of its client or the one it is dealing with. The importance of knowing the client’s details even become higher when it comes to financial institutions.
KYC to Get Valid Details of Client
Best way to have verified details of your customers is KYC (know your customer). KYC is a single-time formality done at the time of initial verification of the identity of the customer.
Nowadays, many businesses, particularly financial organizations, need to complete the KYC procedure of their clients before permitting them to catch glimpses of their services.
For looking into the different service & offers of the mutual fund as well, KYC formalities must be accomplished beforehand, otherwise, an investor will neither be able to make any investment in the mutual fund not will he be able to access all the schemes & mutual fund houses.
How to Complete KYC?
KYC formalities can be completed in two ways:- either by visiting the official website of the mutual fund house or by contacting the SAG Registrar and Share Transfer Agent (RTA) of the mutual fund house.
E-KYC facility available on the website of the fund house can be used by the investor to complete the KYC process online. Another simple method to go to the website of the registrar and transfer agents (RTA) such as CAMS, Karvy, etc. and fill the relevant KYC application form with genuine credentials. One may start the KYC process using Permanent Account Number or PAN as proof.
Prerequisites for KYC
It should be noted that the KYC process can be completed only when you have a valid identity as well as address proof, these are the prerequisites for the KYC process to complete. PAN Card, Adhaar Card or any other valid document can be used as Identity proof. While for the Address proofs, one may use electricity bill, phone bill of landline, voter id, passport or Adhaar Card.
The hard copies of these proofs should be scanned properly to get their soft copies which have to be uploaded on the website as identity and address proofs.
Advantages Of Aadhaar eKYC
Transparency, Confidentiality and Safety
eKYC is completely digital which phases out the paperwork. Paperwork is prone to the risks of theft & damage of important documents and requires the applicant to submit multiple hard copies of their ID and address proofs. The digitalisation of the KYC process promises confidentiality & safety of such important documents and ensures transparency in the complete process.
Unlike manual KYC which consumes 7 working days in the entire process, e-KYC is prompt. It begins as soon as an applicant fills a KYC application form, followed by online submission of soft copies of required documents such as Aadhar card, Pan card, Passport, etc and finishes just after the personal verification through web-based video chat.
Easy Bank Account and Loan
Aadhar – a12 Digits unique identification number from the Unique Identification Authority of India (UIDAI) is a solid & reliable identification document. With the help of verified Aadhar, a user can easily get his bank account opened and can easily avail loan from the bank.
Biometric Verification extends the investment limit
Biometric Verification conducted by the Mutual Fund Houses or RTAs of mutual fund houses using biometric scanner extends the annual investment limit of INR 50,000 per asset management company which is restricted to INR 50,000 in eKYC without biometric identification.
Limitations Of eKYC
At present, there is only one limitation of eKYC which is the investment up to INR 50,000 per year. An investor can make an annual investment only up to INR 50,000 per fund house.
However, the quick fix for this is also available. If the investor wants to become eligible to invest more than INR 50,000 per year, he needs to go through biometric identification or an In-personal verification (IPV) which is conducted by an authorised official of mutual fund houses or RTA via an online video chat. For offline transactions, users will need to sign manually.
- e-KYC increases the credibility of the users as well as of Aadhar card itself.
- e-KYC increases the per year investment limit for the mutual fund investors.
- e-KYC allows you to look into the different offers & schemes of a company.
- e-KYC simplifies & expedites the registration process.
- e-KYC increases the value of the Assets Management Company (AMC).
- Mandatory e-KYC to access the offer increases the sign-ups on the official website of AMCs.
- e-KYC guidelines of Securities and Exchange Board of India (SEBI) have eased the Investment process like never before.
KYC Process in Steps
KYC process includes the following steps:
Step 1. Visit the official website of the mutual fund house.
Visit the official website of RTA of the mutual fund house.
Step 2. Fill the relevant KYC application form with correct details.
Step 3. Upload the soft copies of your ID & Address proof on the website.
Step 4. Complete the personal verification conducted by an authorized person of fund house or RTA.
Step 5. Receive the KYC identification number.
Personal verification refers to a web-based video chat through which concerned person of the fund house or RTA verifies and authenticates the identity of the investor in person. Once this step is done, the ball goes out of investor’s court which means the duty from investor’s side ends here.
When the concerned person of the fund house or RTA is done with the verification of all the details and execution of all the other remaining formalities, he shall issue a KYC identification number to the investor. And this permits the investor to surf various schemes and invest in the most profitable one.
Wrapping up !
So, you want to treasure trove different schemes to invest in the most lucrative one, you must first complete your KYC. Although Registrar & Transfer Agent Services offers you the latest beneficial schemes from time to time, you must have access to such investment plans. So get your KYC done and discover the offers by mutual fund houses!