E-PaperWhat is the latest KYC challenge with mutual funds and how to resolve it?
From 1st April 2024, if the KYC status is ‘KYC validated’, investors can continue to invest seamlessly. If the status is ‘registered’, for new investments with new AMCs, they will have to submit KYC documents. If the status is ‘on hold’, there may be restrictions on certain transactions.
In the last few years, mutual funds have become the preferred mode of investment for retail investors. However, from 1st April 2024, some investors have been facing challenges in making new investments with new AMCs, and some investors have been facing challenges in redemptions due to KYC changes.
In this article, we will understand the new KYC changes applicable from 1st April 2024 and what you should do to ensure smooth investments/redemptions.
Also Read: Mutual Funds: New KYC norms for investors take effect from 2024-25; here’s what you need to know
KYC changes from 1st April 2024
If you are facing any challenges with new mutual fund investments or redemptions, you should check your KYC status. You can check your KYC status with a KRA like CVL KRA, NDML KRA, CAMS KRA, DOTEX KRA, KARVY KRA, etc. Based on the KRA status, here is the action you need to take.
KYC status | What should an investor do |
KYC validated | It means your Aadhaar details have been validated with the UIDAI database. Your PAN – Aadhaar linking is done, email address and/or mobile number have been validated. You don’t need to take any action on KYC. You can continue with existing investments and also make new ones with any AMC or SEBI-Registered Intermediary (SRI) seamlessly. |
KYC registered | It means your Aadhaar (physical copy) or non-Aadhaar OVD (officially valid document) cannot be validated with the issuing authority. Your email address and/or mobile number have been validated. You can continue transacting with the existing mutual fund houses where you have investments. To invest in a new MF, you must submit a fresh set of KYC documents every time. You will need to complete your KYC process using Aadhaar as OVD through online mode and get successfully validated. Once the status changes to “KYC Validated”, you can invest with any fund house. |
KYC on hold (Non-Aadhaar OVDs) – Allowed OVDs | It means your non-Aadhaar OVD (allowed OVD) cannot be validated with the issuing authority. Your email and/or mobile number are not validated. You will need to submit a valid email and/or mobile to the SRI / AMC. They will upload it as a KYC modification request with the concerned KRA. You will need to complete your KYC process using Aadhaar as OVD through online mode and get successfully validated. Once the status changes to “KYC Validated”, you can invest with any fund house. |
KYC on hold (Deemed OVDs) – Other than allowed OVDs | It means your OVD cannot be validated with the issuing authority. Your email and/or mobile number are not validated. All financial and select non-financial transactions will be restricted. You will need to submit a valid email and/or mobile to the existing and new SRI / AMC. They will upload it as a KYC modification request with the concerned KRA. You will need to complete your KYC process using Aadhaar as OVD through online mode and get successfully validated. Once the status changes to “KYC Validated”, you can invest with any fund house. |
KYC on hold (Non-OVDs) | All financial and select non-financial transactions will be restricted. You will have to do re-KYC in your existing and new SRI / AMC using the prescribed OVDs. You will need to complete your KYC process using Aadhaar as OVD through online mode and get successfully validated. Once the status changes to “KYC Validated”, you can invest with any fund house. |
KYC on hold (Invalid contact details) | All financial and select non-financial transactions will be restricted. You will have to provide new contact details before transacting with the existing SRI / MF. You will need to complete your KYC process using Aadhaar as OVD through online mode and get successfully validated. Once the status changes to “KYC Validated”, you can invest with any fund house. |
As per the above table, if your KYC status is anything other than "KYC Validated", you should take steps to get the status updated to "KYC Validated". In some cases (status – KYC Registered), you can continue transacting with the existing fund house/s. However, to start investments with new fund houses, you will have to get the status updated to "KYC Validated" to continue transacting seamlessly without having to submit KYC documents again.
Also Read: Mutual Funds: How to check KYC status and what actions you might need to take? A step-by-step guide
How to get the KYC status updated?
The first step is to check the current KYC status. Visit your KRA website as mentioned below, enter your PAN details and submit. Your KYC status with other details will be displayed.
Following are the links for the various KRAs.
KRA name | KYC section |
CVL KRA | Visit https://www.cvlkra.com/ and click on “KYC Enquiry” |
CAMS KRA | Visit https://www.camskra.com/ and click on the “My KYC Status” section |
NSDL KRA | Visit https://kra.ndml.in/kra-eb/jsps/pos/KYCClientInquiry_NEW.jsp and click on the “KYC Inquiry” link |
NSE KRA | Visit https://www.nsekra.com/ and click on the “KYC Inquiry” section |
KARVY KRA | Visit https://www.karvykra.com/UPanSearchGlobalWithPanExempt.aspx and enter your PAN number in the “KYC Enquiry” section |
To invest seamlessly with any AMC, your KYC status should be “KYC Validated”. For this, you need to have the following:
- PAN should be validated with the Income Tax Department (ITD) database
- Aadhaar should be validated with the UIDAI database
- PAN and Aadhaar should be linked successfully or should not be applicable
- Email and/or mobile number should be validated
If your KYC status is not “KYC Validated”, you can get it updated by submitting a modification request on the mutual fund house website or the KRA website. The other option is to download the form or visit the investor service centre of the AMC / KRA and submit the duly filled form with the requisite documents.
If your KYC status is anything other than “KYC Validated”, you will have to complete the KYC process using Aadhaar as OVD through online mode. When you enter your Aadhaar number, the details will be verified online with the UIDAI database. On verification, the status will change to “KYC Validated”.
Once the status changes to “KYC Validated”, you can make new investments with any AMC and continue with your existing investments seamlessly.
KYC validation: Key to seamless investing
If your KYC status is not validated, it is recommended that you get it validated by using your Aadhaar as OVD through online mode. It is a one-time process, and once completed, you will be able to invest seamlessly across AMCs. Continuing hassle-free investments is the key to achieving financial goals and financial freedom in the long run.
Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached at LinkedIn.
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