Know Your Customer (KYC)
KYC stands for "Know Your Customer" and it's a mandatory process in India for investing in mutual funds. It's basically a background check done by financial institutions to verify identity and address of beneficial owners.
Here's why KYC is important for mutual funds:
Prevents fraud and money laundering: By verifying the identity of beneficial owners, KYC helps make sure that the money being invested actually belongs to the owner and is not obtained illegally.
Protects you: KYC helps ensure investments are safe and reduces the risk of identity theft.
The KYC registration process is centralized through KYC Registration Agencies (KRAs) registered with SEBI. For KYC related queries, please contact CAMS KRA at 18005726558 (Toll free); Email:enq_kyc@camskra.com. Alternately you may also contact SBIMF Toll free 18002093333 / 18004255425.
What documents are required to be submitted along with KYC application?
• Proof of Identity
• Proof of address
What are the key changes in the KYC norms from 1st April 2024?
As per SEBI regulations the following factors are to be validated for all new and existing KYCs. In case any validation fails the, KYC status may change to 'Registered' or 'On-hold'
- Name as per Income Tax Records
- Address is validated via AADHAAR (Digilocker based/ XML based / Via UIDAI)
- Mobile number and e-mail ID
When is KYC to be done?
KYC is to be carried out at the time of commencement of an account based relationship. Existing clients are required to update their KYC documents from time to time.
Why is KYC compulsory?
The Prevention of Money Laundering Act, 2002 (PMLA) along with the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (PML Rules) are the principal laws enacted to prevent money laundering activities in India. As per PMLA and Rules framed thereunder, intermediaries in securities market are required to perform Client Due Diligence. KYC records including details submitted for account opening of the client play a crucial role in ensuring Client Due Diligence.
What are the benefits of KYC?
The main aim of conducting KYC is to verify the identity of clients / beneficial owners, nature and purpose of client relationships and examine the probabilities of any illegal wrongdoings. Additionally, KYC helps to make sure that all transactions are legitimate and transparent.
Updating KYC details from time to time with the intermediaries, aids the investors in receiving timely information.
Which documents are acceptable as Proof of Identity (PoI) and Proof of Address (PoA)?
The following documents are acceptable as PoI and PoA:
For Individuals
• Passport
• Driving licence
• Proof of possession of Aadhaar number
• Voter's Identity Card
• Job Card issued by NREGA
• Letter issued by the National Population Register containing
details of name address
• Any other document as notified by the Central Government in consultation with the Regulator
• Job Card issued by NREGA
For HUF
• PAN Card of the HUF.
• Latest Bank Passbook (not more than 3 months prior to the date of application).
• Bank account statement (not more than 3 months prior to the date of application). Alternately, any of the documents listed for proof of address for an individual can be provided by the karta.
For Non individuals (PAN Mandatory) Companies / Bodies Corporate
• Certificate of incorporation.
• Memorandum & Articles of Association.
• Resolution of the Board of Directors authorizing investment in mutual funds.
• Power of Attorney granted to its managers,
officers or employees to transact business on its behalf (Authorized Signatories List).
For Partnership firms
• Certificates of Registration, in case of registered Partnership Firms.
• Any other officially valid documents in respect of holding a power of attorney to transact (Authorized Signatories List and resolution / authority
to invest).
For Trusts, foundations, NGO's Charitable Bodies, Clubs/Mutual Fund Schemes
• Certificate of Registration, in case of registered Trusts.
• Any other valid documents in respect of holding a power of attorney to transact (Authorized Signatories List and resolution / authority to invest) and resolution
/ authority to invest).
• Offer Document of the Mutual Fund Scheme.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Asset Management Company
SBI Funds Management Limited (A joint venture between SBI & AMUNDI). Trustee Company: SBI Mutual Fund Trustee Company Pvt. Ltd.
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