KYC Process For Mutual Funds - Documents Required & KYC Steps

Whether you wish to open a bank account, avail a loan, open a Demat account, invest in mutual funds, or perform other similar financial activities, getting your KYC done is necessary. The Reserve Bank of India mandated the KYC process in the year 2004. Since then, carrying out KYC for their customers has been compulsory for all Indian financial institutions.Let’s understand the KYC process and its importance for investing in mutual funds.

KYC (Know Your Customer) is a simple one-time process carried out by mutual fund houses to verify their customers' identity, address, and other details before transacting with them. The customer is asked to submit the essential KYC documents that are scrutinized and verified to establish the customer's authenticity. Once the process is satisfactorily completed, you can start investing in mutual funds.

• It helps mutual fund companies to establish the genuine identity of their customers.
• As per the Prevention of Money Laundering Act 2002, KYC for mutual funds is mandatory to ensure that no illegal money that is earned through unfair means or illegitimate businesses is being invested. Mutual fund houses want to keep up their credibility and prefer customers who are not involved in corrupt businesses or practices.
• The financial history of the investor is also checked by examining their past financial records and defaults, if any. It helps the companies assess the associated risk while dealing with a customer.

A copy of the following documents is required for getting your KYC done:

• ID and Address Proof: Adhaar card , PAN card, passport, driving license , etc., can be used as ID proof. The documents with address details such as Adhaar, driving license, passport, electricity bill, etc., can be provided as address proof.
• PAN Card: It provides information related to income tax payments and sources of income.
• Bank Details: It is used to verify the account you'll use to pay for mutual fund investments and the account where you will receive the money upon redemption of the mutual fund.
• Photo: 1-2 passport-size photographs are required to supplement the ID proof.

• CAMS Investor Services Private Ltd.
• DotEx International Ltd.
• CSDL Ventures Ltd.
• Karvy Data Management Services Ltd.
• NSDL Database Management Ltd.

Also Read: What are Mutual Funds? How it Works, Meaning, Benefits & Types

Online KYC -

Online KYC or e-KYC can be done either through the AMC/mutual fund house website or through the website of any one of the SEBI registered KRAs. You can follow the below steps and complete the KYC:

• Create a login and fill out the online form with all the required details.
• Scan and upload the necessary documents.
• Verify Identity through a video call (Webcam is required for online in-person verification IPV)

Note: Some fund houses do Adhaar-based KYC that allows you to invest only up to 50,000 Rs. per year per fund house. After video IPV, this 50,000 Rs. limit is removed.

Offline KYC -

For offline KYC, you need to visit the AMC/fund house/KRAs or any financial advisor’s office and complete the KYC in the below steps:

• Obtain the physical application form and fill out the required details.
• Attach the hard copies of the required documents to the application form and submit them to the office.

It may take up to 7 days after the document submission for KRA to approve the KYC.

A successful KYC is mandatory before you start investing in any mutual fund. To check and confirm your KYC status, you can log in to the website of any of the KRAs (such ashttps://kra.ndml.in/) and fill in your PAN number and other details to get your KYC status displayed.