Mutual fund investments are getting frozen due to non-compliance with the Know Your Customer (KYC) norms.
Recently, many investors’ mutual fund accounts were flagged because they had not redone their KYC by April 1.
Sebi initiated this action due to revisions in the list of officially accepted documents (OVD). Previously, bank statements and bills were acceptable for mutual fund accounts, but they no longer hold validity.
Consequently, individuals are uncertain whether they can undergo the re-KYC process through online or offline channels.
The KRAs have changed the KYC status of all existing KYC complied investors after validating attributes such as PAN, Name and Address with the official database.
With changes in the investor’s identity or contact details, KYC renewal, or re-KYC, is necessary? But how can investors complete this process and unfreeze their investments? The answer depends on the investor’s category.
Jyoti Bhandari, Founder and CEO of Lovak Capital, says, “If the address is verified with Aadhaar, then it is possible to do the re-KYC process online; however, if Aadhaar is not used for re-KYC, then it has to be done offline. Also, if investor KYC is registered but email and mobile are not validated, then the investor will have to get the re-KYC offline.”
“One of our investors’ folios was on hold as his email was not validated in the KYC. Although his existing SIPs were going through, he could not make new investments in the same folio. He had to do the re-KYC and Email validation KYC and validate.
One must not forget that KYC is very important in the process of mutual fund investing. It ensures the security and credibility of the investor. Therefore, it becomes necessary for investors to keep their KYC details updated and undergo re-KYC if any details change.
