The Securities and Exchange Board of India (SEBI) has revised its know-your-customer (KYC) norms, making it easier for investors to engage in mutual fund transactions even if their Permanent Account Number (PAN) is not linked with Aadhaar. This change, effective from May 14, 2024, removes a significant hurdle for many investors.
Previously, linking PAN with Aadhaar was a mandatory requirement for achieving both ‘KYC Registered’ and ‘KYC Validated’ statuses. Investors who did not link their PAN with Aadhaar saw their KYC status marked as ‘On-hold KYC,’ restricting their ability to transact in mutual funds.
Under the new regulations, investors can achieve a ‘KYC Registered’ status without linking their PAN and Aadhaar, provided that a KYC Registration Agency (KRA) has verified their PAN, name, and address. However, the linkage is still required for the ‘KYC Validated’ status.
To obtain ‘KYC Registered’ status, investors must complete the KYC process using other officially valid documents (OVDs), such as Aadhaar, passport, driving license, or voter ID card.
How to Check Mutual Fund KYC Status
Investors can check their mutual fund KYC status by following these steps:
1. Log on to www.cvlkra.com.
2. Click on the KYC inquiry option to view the status of your existing mutual fund KYC.
The following statuses may be displayed:
1. On-hold KYC Status: Investors with this status cannot engage in any mutual fund transactions, including systematic investment plans (SIPs), lump sum purchases, or redemption requests.
2. KYC Validated Status: Investors with this status face no restrictions and can transact with any asset management company (AMC) or fund house.
3. KYC Registered Status: These investors can only transact with AMCs or fund houses where they already have investments.
If the status is ‘KYC On-hold,’ it could be due to non-validation of mobile or email ID, PAN not linked with Aadhaar, or deficiencies in KYC documents. In such cases, investors need to upload valid documents on the mutual fund website to resolve the issue.
This move by SEBI aims to streamline the KYC process and remove barriers to mutual fund investments, providing greater flexibility for investors.
