KYC
KYC is an acronym for “Know your Customer”, a term used for customer identification process. It involves making reasonable efforts to determine true identity and beneficial ownership of accounts, source of funds and the nature of customer’s business. The objective of the KYC guidelines is to prevent banks being used, intentionally or unintentionally by criminal elements for money laundering.
Compliance with KYC is mandatory for investing in financial instruments. KYC compliance has taken many avatars prior to current state of affairs whereby you need to do a KYC with your bank and another one for investing in capital market products (Mutual funds & Stocks).
The KYC done with the bank is sufficient to buy Insurance products as well. However to invest in any capital market products, you need to do a separate KYC. This KYC is valid to invest in Mutual funds (direct or through intermediaries), stock brokers and to avail portfolio management services.
To do your KYC, you need to fill out the application form, provide address proof and PAN copy. KYC has two components - Identity and Address. While identity remains the same, the address may change and hence the banks are required to periodically update their records.
What if I have not done my Bank KYC?
If at any point of time, the balance in a client's account with the bank is Rs. 50,000/- or total credit in the account exceeds Rs. 1,00,000/- in a year, no further transactions will be permitted until the full KYC procedure is completed.
What if I have not done my mutual funds KYC?
Although you may have existing investments done without the KYC, you would not be able to make any fresh investments without having completed your KYC. There is an in-person-verification (IPV) that needs to be done as part of the KYC procedure. Once this is done, you may check the status of your KYC at www.cvlindia.com
KRAs
SEBI has authorized 5 KYC registration agencies (KRAs) to maintain records and update KYC information where applicable. These KRAs are:
Compliance with KYC is mandatory for investing in financial instruments. KYC compliance has taken many avatars prior to current state of affairs whereby you need to do a KYC with your bank and another one for investing in capital market products (Mutual funds & Stocks).
The KYC done with the bank is sufficient to buy Insurance products as well. However to invest in any capital market products, you need to do a separate KYC. This KYC is valid to invest in Mutual funds (direct or through intermediaries), stock brokers and to avail portfolio management services.
To do your KYC, you need to fill out the application form, provide address proof and PAN copy. KYC has two components - Identity and Address. While identity remains the same, the address may change and hence the banks are required to periodically update their records.
What if I have not done my Bank KYC?
If at any point of time, the balance in a client's account with the bank is Rs. 50,000/- or total credit in the account exceeds Rs. 1,00,000/- in a year, no further transactions will be permitted until the full KYC procedure is completed.
What if I have not done my mutual funds KYC?
Although you may have existing investments done without the KYC, you would not be able to make any fresh investments without having completed your KYC. There is an in-person-verification (IPV) that needs to be done as part of the KYC procedure. Once this is done, you may check the status of your KYC at www.cvlindia.com
KRAs
SEBI has authorized 5 KYC registration agencies (KRAs) to maintain records and update KYC information where applicable. These KRAs are:
- Karvy Data Management Services Ltd
- CAMSKRA (set up by Computer Age Management Services - CAMS)
- CDSL Ventures Ltd (CVL, a division of Central Depository Services (India) Ltd
- NSDL Database Management Ltd (NDML, a subsidiary of National Securities Depository Ltd)
- DotEx International Ltd, a unit of the National Stock Exchange
So, to avoid obstacles and unwanted delays when you want to enter/exit the market or buy any financial product, ensure you have your and your spouse's KYC done with your bank and any mutual fund house.
Comments
Post a Comment