Primer on KYC

What is KYC (Know Your Customers)?

KYC stands for “Know Your Customers”. You have to be KYC compliant if you wish to invest in the mutual funds. Don’t worry, this is just one-time exercise and once you complete this, you are ready to invest in mutual funds through any platform.

As per the regulatory guidelines, the identity of an investor is verified based on written details submitted by him/her on a form, supplemented by an IPV (In-Person Verification Process). Once the verification is completed successfully, the relevant investor data is entered into the KYC Registration Agency (KRA) system and subsequently uploaded to their database.

What is the intent behind

The intent behind the KYC documentation is to tackle the Money Laundering menace. The link between money laundering, organized crime, drug trafficking, and terrorism poses a risk to all financial institutions. Hence, there is a need to know and understand our investors in a much better manner than ever before. The objective of GOI is also to reduce the burden of multiple KYC documentation by shifting to CKYC.

How to check whether I am KYC compliant?

To check whether you are KYC compliant or not, you have to login into KRA websites (CVL/CAMS/NDML, etc) and enter basic details such as PAN number, email id, AMC name, bank name, date of birth, mode of holding and tax status, etc. On providing these details, the KYC compliance status of the investor will be displayed. If you are not KYC compliant, you need to do it ASAP.

What is the difference between KYC, e-KYC, and CKYC?

KYC stands for normal KYC where there is no cap on the investment amounts. E-KYC is based on Aadhaar based authentication. This can be done through either OTP (One Time Password) or Biometric s. If e-KYC authentication is done through OTP, there is a limit of investment at Rs.50, 000/- per year per mutual fund. However, if e-KYC is done through Biometrics, there is no cap on the investment unless those specifically imposed by the scheme/Fund House. Now the third category is CKYC (centralized KYC), an initiative of GOI, which would comply with all entities governed and regulated by GOI or regulators like RBI, SEBI, IRDA, and PFRDA.

Do the information sought by the current KYC form and CKYC form is the same?

No. CKYC requires additional information like investor’s maiden name, mother’s name, FATCA information, etc to be collected and submitted to CERSAI for completion of the CKYC formalities of an investor.

What is KYC Identification Number (KIN)?

KYC Identification Number (KIN) is a 14 digit number allotted by CERSAI (acts as the Central KYC Records Registry) to an investor who has completed his / her CKYC formalities. This number should be mentioned each time the CKYC details are required to be accessed by any intermediary.

For whom CKYC compliance is mandatory?

As per the new guideline (effective from February 01, 2018), new investors (for whom no record exists in any of the KRAs) will have to mandatorily submit the CKYC form along with the investment application. If you are a new investor and have filled the KRA application form in lieu of CKYC form, you have to additionally submit the Supplementary CKYC form along with the KRA application form.

However, existing investors (whose record exists in any of the KRAs regardless of the KYC status) can continue making investments without any additional requirement. So, if any modification is required in the normal KYC form, you need to submit only KRA forms.

What are the documents required for the CKYC?

You have to submit following documents for completion of CKYC formalities:

  1. Duly filled and signed CKYC application form or KRA application form + Supplementary CKYC form
  2. Self-attested copy of Identity Proof (PAN/Passport/Voter ID/DL/Aadhaar/any doc notified by central government)
  3. Self-attested copy of Address Proof (Passport/Voter ID/DL/Aadhaar/any doc notified by central government)
  4. One Photograph

How will the KIN be informed to me?

You will not receive any physical documents. Once KIN is generated, CERSAI would intimate you through SMS/email to your registered mobile number and e-mail id, respectively. Normally it takes 4-5 days to get your KIN. However, you will not receive any intimation for your rejected CKYC application.

Can I check the CKYC status online?

Unfortunately No!!! There is no such facility, as we speak. Nonetheless, if you have been intimated through your registered email id and SMS, you shall sit back and relax and focus on investing. You are CKYC compliant.

Can we complete the KYC online through DreamLadder?

Yes!!! The KYC formalities can be completed online through us. Our endeavor has been to provide a hassle-free and quicker approach to investing for our valuable clients.

You can follow the steps and upload documents/images as specified in the KYC section. If you are an existing investor (means your record exists in any of the KRAs regardless of the KYC status), you need to submit only KRA form for any modification in the normal KYC form. However, if you are a new investor (means your record doesn’t exist in any of the KRAs), you will have to mandatorily submit the CKYC form along with the investment application. This regulation is effective since February 01, 2018.