Mutual fund investors who utilized utility bills or bank statements for their KYC (Know Your Customer) process are required to update their records with officially valid documents by March 31, as communicated by registrars KFintech and CAMS to distributors.
Officially valid documents encompass passports, Aadhaar cards, driving licenses, voter IDs, NREGA job cards, and National Population Register (NPR) letters containing name and address details. Failure to comply with this update will lead to a freeze on new transactions.
Additionally, deemed officially valid documents, which also require re-KYC, include identity cards issued by central or state governments, letters from gazetted officers, utility bills, property or municipal tax receipts, bank account/post office account statements, and pension or family pension payment orders.
However, there is currently confusion among mutual fund distributors due to varying instructions from different registrars, such as CAMS and KFintech, leading to discrepancies over documents like driving licenses.
While CAMS states that accounts displaying a driving license need to resubmit their KYC, KFintech lists a driving license as an officially valid document.
Amol Joshi, a mutual fund distributor and founder of PlanRupee Investment Service, expressed concerns about the confusion caused by inconsistent communications from registrar and transfer agents (RTAs), emphasizing that compliance with regulations is in everyone’s interest.
Mutual fund distributors are also worried about the practicality of re-verification, particularly questioning whether there is an online option available. The requirement for physical presence for re-KYC is considered cumbersome and time-consuming.
Investors are facing challenges due to the limited time frame provided for compliance and the absence of online options. Pushkar Shah, a mutual fund distributor and co-founder of Proton Wealth, pointed out that the physical process may lead to delays and rejections. He highlighted the absence of an online KYC modification service that accepts PANs across KRAs, emphasizing verified cases where KYC did not go through.
As of now, emails sent to CAMS and KFintech have not yielded responses. The industry awaits further clarification and potentially streamlined processes to alleviate concerns among mutual fund investors and distributors.
