Must Knows

KYC (know your customer): Purpose, procedure and requirement

[ecis2016.org] KYC verification is often the first step for most financial transactions in India. Here’s all you need to know about it

What is KYC?

KYC or ‘know your customer’ is a procedure in which a financial company verifies the identity of the customer and assesses their appropriateness and whether there is any possibility of illegal activity. For example, KYC requirements for banking or financial transactions, are a good technique to prevent money laundering.

Purpose of KYC

KYC’s main aim is to ensure that deposits/investments are made in the name of a real person. Additionally, it aids in the reduction of black money. For example, mutual fund investors must follow the KYC procedure through a KYC Registration Agency (KRA). A SEBI-registered KRA firm will store investor data in a single database to which all fund houses and intermediaries have access. Some well-known agencies are CAMS, NSE, and KDMS. SEBI later announced a single Know Your Client methodology, to ensure consistency and uniformity among SEBI-registered intermediaries. This makes it easy for mutual fund firms, portfolio managers, venture capital funds, and stockbrokers, among others, to avoid duplicate KYC paperwork.

[ecis2016.org] All about mutual funds

KYC: How to check KYC compliance?

KYC verification is often the first step for most financial transactions in India. It is generally a one-time process. You may already be KYC-compliant, even if you do not know it. For example, for mutual funds, KYC is the first stage in investing in mutual funds. Checking your KYC status online is very easy. You can check your KYC compliance status by going to the CDSL Ventures Limited official website and entering your PAN details.

Documents required for KYC

Along with the ‘Know Your Client’ application form and a passport-sized photograph, investors may have to submit the following papers.

  1. ID proof
  • Aadhaar card
  • PAN card
  • Driving licence
  1. Proof of residence
  • Electricity bill
  • Passport copy
  • Demat account statement
  • Ration Card
  • Voter ID

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Procedure for KYC

CDSL Ventures Limited has been recognised and authorised by the mutual fund industry to carry out the KYC procedure. The procedure can be finished both, offline and online.

Offline KYC

  • Fill out the KYC application form available on the CDSL Ventures website.
  • Attach attested photocopies of ID and residence proof, as well as a passport-size photo, to the form.
  • Sign and deliver a physical copy of the document to the authorities or intermediaries through which you desire to invest in mutual funds.

Online KYC

You could complete the KYC online by going to the website of the financial institution or mutual fund company or the KRA (KYC Registration Agency). You must fill out the KYC form with your information. You will be required to upload self-attested copies of your identity and address proof, as well as a passport-sized photograph. Originals must be produced for verification during IPV (in-person verification).

Using Aadhaar biometric data

If you have an Aadhaar card, you can choose an Aadhaar-based KYC. You may request that an official from the fund house or agency come to your location to collect the information. Send a copy of your Aadhaar card to the fund house, broker, or distributor and they will map your fingerprints on their scanner and link them to the Aadhaar database. Your information will be displayed in the database if the fingerprint matches that in the database. This signifies that they have verified your identity before proceeding with your mutual fund investment.

How to update KYC online?

Go to the KRA’s eKYC portal and log in with your credentials. Then click on the option to update KYC. You will then be required to enter your new information and upload scanned copies of the necessary documents. You must finish the verification process by entering the OTP received on your registered mobile number. Then submit the information, to finish the online KYC update.

Also read all about No objection certificate from legal heirs for property transfer in India

What is KYC status?

KYC, or Know Your Customer, is a way of identifying and authenticating bank customers or stock, mutual fund and other investment customers. Customers must complete the KYC process, before accessing services or conducting transactions at banks, according to RBI regulations. Listed below are a few methods to help you check the KYC status in various situations.

How to check KYC status of a mutual fund?

Before investing in mutual funds, you should consider completing your KYC (know your customer) process. You may be required to present papers such as your PAN as proof of identification and your passport / licence / Aadhaar / Voter ID / driver’s ID as proof of address. You must provide self-attested copies of all of these documents, as well as a couple of passport-size pictures and display the originals during IPV.

You can check the status of KYC on the KRA’s website (KYC Registration Agency), by providing your PAN. However, if you have completed the KYC without a PAN, you can verify the KYC status of mutual funds by entering your name, DoB, and PAN-exempt category, along with the captcha code.

How can I check the status of my Aadhaar eKYC?

You can log on to the website of the financial entity that offers Aadhaar-based KYC with your credentials. To check the Aadhaar eKYC status, just enter your Aadhaar number.

How do I verify the CVL KYC status?

You can check your KYC status by going to the CVL KYC website and clicking on the ‘Inquire on KYC’ button after logging in with your credentials. To check the current status of your Aadhaar-based KYC registration, input your Aadhaar number. You should consider repeating the process for PAN-based registration. However, you can use this procedure to enter your PAN number instead of your Aadhaar number.

How can I check the KYC status of a bank account?

Visit your bank’s website and locate the ‘Check KYC status’ link or something similar. To verify the KYC status of your bank account, simply input the bank account number and the captcha. You may also check the bank account KYC status by logging into your internet banking account.

How do I verify the KYC status of my PAN card?

You could try entering your PAN on the CDSL (Central Depository Services Limited) website. If your KYC verification is complete, your status will be upgraded to MF-Verified by CVLMF. If your KYC status has not been validated, you will see the status ‘Pending.’

How do I verify the progress of my UAN KYC?

You could use your UAN card to check the EPF KYC status. You must go to the e-Sewa portal and sign in with the correct credentials. Then, go to the ‘View’ tab and select the ‘UAN card’ option. If all of your KYC details in the EPF account have been updated, the UAN Card will indicate ‘Yes’ before the KYC information row.

Also read our guide on UAN login

How can I determine the KYC status of my EPF?

You can use your UAN to check the KYC status of your EPF. You can access your account by going to the member e-sewa site and entering your credentials. Select the ‘View’ tab and the ‘UAN Card’ option. If your KYC details in the EPF account are updated, the UAN card will show ‘Yes’ in the KYC information row.

How can I check the director’s KYC status?

All existing directors must update their information with the income tax database. Go to the MCA portal at mca.gov.in. Go to MCA Services> DIN Services> Verify DIN.

You can enter the DIN (director identification number) and submit the form. You then enter the PAN (director) and press the submit button to check the director’s KYC status. The name of the director would be presented as per the DIN database, along with the message that states that the DIN details match the income tax PAN database.

Source: https://ecis2016.org/.
Copyright belongs to: ecis2016.org

Debora Berti

Università degli Studi di Firenze, IT

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