73% of Records Validated, System in Place for Remaining Investors
Know-your-customer (KYC) registration agencies announced that as of March 31, 2024, 73% of the 108.3 million KYC records have been validated. This update comes amidst concerns raised by investors and mutual fund distributors regarding the new KYC norms. These norms prevent investors with unvalidated KYC records from starting new MF investments in any fund house other than those where they are already invested.
KYC Validated, KYC Registered/Verified, and KYC On Hold. Currently, 15% of records fall under the KYC Registered status, while the remaining 12% are under KYC On Hold. Investors with KYC On Hold status are also restricted from transacting in existing MF folios.
The KRAs, including CDSL Ventures, Computer Age Management Services, National Stock Exchange, and Karvy, have established dedicated help desks and call centers to assist investors. They also communicate with intermediaries and investors regarding KYC status verification progress and any modifications to KYC records.
Mutual funds have also taken steps to educate investors about the KYC issue and assist those without validated KYC. The Association of Mutual Funds in India (Amfi) released an explainer on the KYC issue and listed remedial measures. Additionally, Edelweiss MF has set up a dedicated help desk for assistance.
The issue arose after April 1, when MFs were restricted from onboarding investors whose KYC was not done using officially valid documents like Aadhaar. These investors must redo their KYC using a valid document to invest in MF schemes outside of those offered by their existing fund houses.
Investors can validate their KYC through any MF website or by submitting the KYC form to any asset management company or registrar and transfer agent office.