KYC Requirements for Mutual Fund Investors

KYC Requirements

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KYC Requirements for Mutual Fund Investors

What is KYC?

Know Your Customer (KYC) is a mandatory process for individuals seeking financial services such as opening a bank account, buying insurance, taking loans, or investing in mutual funds. It ensures compliance with legal regulations and prevents unlawful financial activities.

Why is KYC Important for Mutual Funds?

KYC verification is compulsory under the Prevention of Money Laundering Act (2002) and is regulated by SEBI. Since January 1, 2012, investors undergo a one-time KYC process through SEBI-registered KYC Registration Agencies (KRAs) before investing in mutual funds.

Documents Required for KYC

PAN Card – Tracks financial transactions and prevents defaults.
Address Proof – Aadhaar, Passport, or Electricity Bill to confirm nationality and residence.
Identity Proof – Aadhaar or other government-issued ID.
Bank Account Details – Required for transactions.
Photographs – Passport-sized photos for identity verification.

KYC Requirements for Different Investors

Joint Applicants – Each individual must complete KYC separately.
Power of Attorney Holders – Both investor and authorized person must complete KYC.
NRIs/PIOs – Must comply with Indian KYC norms.
Minors – Guardian completes KYC until the minor turns 18.

KYC Process for Mutual Funds

Offline KYC

Submit a filled KYC form with self-attested copies of ID, address proof, PAN, and photographs to a KRA (CVL, NSDL, CAMS, KARVY, NSE).
Track application status online through the respective KRA’s website.

Online KYC

Investors can complete KYC via mutual fund platforms or KRA websites.
Aadhaar-based e-KYC allows instant verification.
If Aadhaar is not linked, KYC processing takes up to 48 hours.

KYC for Banks vs. Investments

Banking KYC (RBI-regulated) and Investment KYC (SEBI-regulated) are separate processes.
A Central KYC (CKYC) was introduced in 2017 but is yet to be fully implemented.

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