Financial institutions use KYC to identify customers and acquire relevant information. KYC is a global phenomenon in which the information collected is used to prevent identity theft, money laundering, fraud, and terrorist financing.
How to comply with KYC
In India, (CVL), a subsidiary of Central Depository Services (India) Limited (CDSL), has been designated by the mutual fund industry to perform KYC verification of investors in India.
You will need to submit the following required documents at a CVL Point of Service (POS) location:
1) Completed KYC request form
2) Proof of residence (utility bill, passport, letter from your employer or housing company, ration card, voter ID or driver’s license).
3) PAN card
If you submit your KYC application in person, you will need the original documents with you, as well as the copies to be processed. The originals will be returned to you once their accuracy has been verified.
If you are sending the document through a courier service, the documents must be notarized by a notary public, official officer or manager of a licensed commercial bank. KYC verification is a free process.
NRIs and PIOs must submit additional documentation along with the items listed above.
1) Certified authentic copy of the passport
2) Certified authentic copy of the address abroad
3) Permanent address
4) For PIO: a certified true copy of the PIO card
All documents must be submitted in English and must be certified by the Consulate or overseas branches of registered commercial banks in India.
How to check your KYC verification status
Log in to the CVL website. Enter your PAN card number and your status will be displayed as:
1) KYC in process
2) Full KYC
3) KYC rejected
Once you are “KYC compliant” via CVL, you will not be prompted to go through the process again. The KYC can be sent to the various mutual funds.
When investing in a mutual fund for the first time, a copy of the KYC Acknowledgment must be attached to the Investment Application Forms/Transaction Slip. Any application form that does not have a KYC Acknowledgment will be rejected.
KYC standards have become a requirement to invest in any capital instrument. Even if you open a Demat account, you will need to comply with KYC. Linking KYC to your investments and the Pan card has made it very easy for the FIU to track down suspicious transactions.