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Are Your Mutual Fund SIPs Frozen? Here's How You Can Update KYC

Ensure your mutual fund investments stay on track by verifying your KYC compliance status online. Simply visit the official website of CDSL Ventures Limited and enter your PAN to confirm whether you're KYC-compliant or not.

Times Now Digital

Updated Apr 19, 2024, 16:56 IST

Mutual Fund SIP KYC, KYC, Mutual Fund Investors, Aadhaar, Re-KYC, KYC

Are Your Mutual Fund SIPs Frozen? Here's How You Can Update KYC (image source: Time Now Digital)

Mutual Fund SIP KYC: The recent mandate for re-KYC (Know Your Customer) for mutual fund investment accounts has left many investors grappling with questions. Mutual fund investors were required to complete the re-KYC process by April 1, 2024, failing which their investment folios would have been frozen.

This exercise was necessitated primarily due to changes in the list of officially valid documents (OVD) accepted for KYC purposes. Previously accepted documents like bank statements and utility bills are no longer valid for mutual fund investment accounts, necessitating the need for re-KYC. status.

Understand The KYC Status

If your mutual fund investments are frozen despite completing the KYC. Before redoing the KYC, first understand the KYC status, which can help you to complete the KYC updated hassle free.

KYC Documents	KYC Status	Remark
KYC with Aadhaar	Validated	Will be able to transact smoothly
KYC With Non-Aadhaar	Registered	Will be able to transact only in AMC in which customers already have folio
KYC With Non-OVD Documents	Rejected	will not be able to transact

What are OVDs?

Officially valid documents (OVD) like Aadhaar, passport, and voter ID. While non-OVD documents include Bank statements, income certificates etc.

How to Check KYC Status Online

Online vs. Offline Re-KYC: Who Needs to Do What?

According to an ET report, Individuals who have linked their Aadhaar with PAN and have their mobile number linked to Aadhaar can complete the re-KYC process online. However, if Aadhaar is not used for re-KYC, the process must be done offline.

How To Update KYC Offline?

Here is a step-by-step guide to update KYC online

Step 1. Download the KYC application form from the CDSL Ventures website.

Step 2. Fill in the required details accurately.

Step 3. Sign the form and submit a physical copy to the designated authorities or intermediaries through whom you plan to invest in mutual funds.

Step 4. Attach attested photocopies of your ID proof, residence proof, and a passport-size photo with the form.

Aadhaar-Based Biometric Option To Update KYC

If you possess an Aadhaar card, opt for Aadhaar-based KYC for added convenience. Request a visit from an official representative of the fund house or agency to collect your details.

Step 1. Submit a copy of your Aadhaar to the relevant entity.

Step 2. They will capture your fingerprints using a scanner and link them to the Aadhaar database.

Step 3. Once your fingerprints are matched with those in the database, your KYC will be validated, enabling seamless mutual fund investments.

How To Complete KYC Online?

Here is a step-by-step guide to update KYC online

Step 1. Visit the website of a mutual fund house or KRA (KYC Registration Agency).

Step 2. Fill out the online KYC form with your details.

Step 3. Upload self-attested copies of your identity and address proof, along with a passport-size photograph.

Step 4. Ensure to present the originals for verification during the In-Person Verification (IPV) process.

By following these steps, you can ensure your KYC status remains up to date, facilitating hassle-free mutual fund investments.

Consequences of Incorrect or Incomplete Re-KYC

According to an ET report KYC status is showing 'registered' instead of 'validated' due to the use of non-Aadhaar OVDs. Such MF Investors may face restrictions when opening new mutual fund accounts or making investments, underscoring the importance of ensuring correct and complete documentation.

Risks of Non-Compliance

Failure to complete re-KYC can have dire consequences, as experienced by one of Jyoti Bhandari's clients whose demat account was blocked, causing a high-value bond transaction to be stalled. Such incidents underscore the urgency of adhering to re-KYC deadlines to avoid financial disruptions.

Challenges and Solutions for Incorrect Re-KYC Details

The report shares instances where MF investors ' KYC status was put on hold or incorrect contact details were captured during re-KYC. Rectifying such errors can be cumbersome and may require additional documentation or online verification.

Safeguards Against Potential Fraud

While incorrect contact details in mutual fund KYC records can be concerning, VLA Ambala reassures that such discrepancies do not affect bank KYC records. Therefore, the risk of financial fraud is mitigated, provided individuals refrain from sharing sensitive bank information based on incorrect mutual fund KYC details.

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