Mutual fund investors who have used utility bills or bank statements for KYC must update their records with officially valid documents by 31 March, according to communication by registrars KFintech and CAMS to distributors.
Official valid documents include passports, Aadhaar cards, driving licences, voter IDs, NREGA job cards, and National Population Register or NPR letters containing name and address details. Non-compliance will result in a freeze on new transactions.
Deemed official valid documents include identity cards issued by the central or state governments, letters issued by gazetted officer, utility bills, property or municipal tax receipts, bank account/post office account statements, and pension or family pension payment orders.
There’s confusion among mutual fund distributors due to varying instructions from different registrars, such as CAMS and KFintech, with discrepancies over documents like driving licences.
While CAMS communication says that accounts that show driving licence need to resubmit their KYC, Kfintech lists a driving licence as an officially valid document.
“While compliance with regulations is in everyone’s interest, there is a state of confusion due to inconsistent communications from RTAs (registrar and transfer agents),” said Amol Joshi, a mutual fund distributor and founder of PlanRupee Investment Service.
Mutual fund distributors are also concerned about the practicality of re-verification, particularly whether there is an online option available. The requirement for physical presence for re-KYC is considered cumbersome and time-consuming.
“It’s too cumbersome for the investor as it gives very little time to comply…There is no option to comply online and investors need to do it physically in a nearby RTA branch,” said Pushkar Shah, a mutual fund distributor and co-founder of Proton Wealth.
Joshi said that this physical process might lead to delays and rejections. “Online KYC modification service launched by CAMS accepts only existing PANs with CAMS KRA. Kfin modification service accepts PANs across KRAs but there have been verified cases of KYC not going through.”
Emails sent to CAMS and KFintech did not elicit a response till press time.
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Published: 12 Mar 2024, 11:24 AM IST