Know Your Customer (KYC)
Know Your Client (KYC) requirement under Prevention of Money Laundering Act, 2002
Central Know Your Customer (CKYC)
1. What is CKYC?
CKYC refers to central KYC (Know Your Customer), a new initiative by Government of India. The aim of this initiative is to have a structure in place which allows investors to do their KYC only once before interacting with various entities across the financial sector. CKYC will be managed by CERSAI (Central Registry of Securitization Asset Reconstruction and Security Interest of India), authorized by Government of India to function as Central KYC Registry (CKYCR). The objective of CKYCR is to reduce the burden of producing KYC documents and getting those verified every time when the investor enters into a new relationship with a financial entity. Thus, CKYCR will act as centralized repository of KYC records of investors in the financial sector with uniform KYC norms and inter-usability of the KYC records across the sector.
2. What is CERSAI?
Central Registry of Securitization Asset Reconstruction and Security Interest (CERSAI) is a central online security interest registry of India authorized by Government of India to act as and to perform the functions of the Central KYC Records Registry under the PMLA (Prevention of Money-Laundering) rules 2005, including receiving storing, safeguarding and retrieving the KYC records in the digital form for a client.
3. How can I complete my KYC formalities?
You may submit the CKYC form at any of our branches along with the other requisite details/proof (attested true copies of supporting documents relating to proof of identity and address or verification with the original) to the Mutual Fund/RTA. The Mutual Fund/RTA will upload the details on the KRA (KYC Registration Agency) system.
4. Is the information that is currently sought on the current KYC form and the new CKYC form, the same?
No. CKYC requires additional information (for e.g. investor's maiden name, mother's name etc) to be collected and submitted to CERSAI for completion of the CKYC formalities of an investor.
5. What is 'KYC Identification Number'?
KYC Identification Number (KIN) is a 14 digit number allotted by CERSAI to an investor who has completed his / her CKYC formalities. This number should be mentioned each time the CKYC details are required to be accessed by any intermediary.
6. From when is the CKYC applicable and what procedure do I need to follow?
New investors, with effect from February 1, 2017 (investors who are not KYC compliant) will have to mandatorily submit the CKYC form along with the investment application. If the investor has filled the old KYC form in lieu of CKYC form, he will have to submit additionally the Supplementary CKYC form along with the old KYC form. Click here for Forms (individual) Existing investors (investors who are KYC compliant) can continue making investments without any change in the current process.
7. Is CKYC compliance mandated for all categories of investors? No. Currently, CKYC is applicable only to Individuals (both Resident Individuals and Non-Resident Individuals (NRIs)).
8. What about PAN? Is it mandatory?
a) Investors who have a valid Permanent Account Number (PAN) need to provide the same for CKYC compliance
b) Investors, who do not have a PAN, need to submit alternate documents (refer CKYC form for details). However, such category of investors can invest (including SIPs) unto Rs.50,000 only per Mutual Fund in a rolling 12 month period or in a financial year i.e. April to March
c) Investors exempt from submission of a PAN:
i) Transactions undertaken on behalf of Central/State Government, by officials appointed by Courts, e.g., Official liquidator, Court receiver, etc.
ii) Investors residing in the state of Sikkim.
9. What are the documents to be submitted for completion of CKYC formalities? You need to submit the following documents:
a) Duly filled and signed CYC / Old KYC form + Supplementary CKYC form
b) One proof of Identity (self-attested copy)
c) One latest proof of Address (self-attested copy)
d) One photograph for each KYC form
10. Please elaborate on the documents to be submitted as proof for the information provided on the CKYC form.
You need to submit both proofs of identity as well as address.
For identity proof, you may submit any one document - PAN/ passport / voter ID/ driving license / Aadhaar card (masked) / NREGA job card / any other document notified by central government.
For address proof, you may use the same proofs as submitted as identity proof (except the PAN, since that does not specify the address). Incase utility bill is provided as proof of address, the same should be within last 3 months. If your permanent address is different from the correspondence address, then you need to submit proof for both the addresses.
Copies of all documents that are submitted need to be compulsorily self-attested by the applicant and accompanied by originals for verification. In case the original of any document is not produced for verification, then the copies should be properly attested by entities authorized for attesting the documents. For more details, please refer to the "instructions / guidelines" over-leaf on CKYC / Supplementary CKYC form.
11. What is In-Person Verification (IPV) and who is authorized to complete IPV?
SEBI vide circular no. MIRSD/Cir-26/2011 dated December 23, 2011 has mandated IPV for all new clients other than non-individuals. In case of mutual funds, the IPV can be performed by AMCs or AMFI/NISM certified distributors who have complied with KYD requirements. Further, details like name of the person doing IPV, designation, organization name, signatures and date of IPV should be recorded on the KYC form at the time of IPV.
The IPV shall be a one-time process and IPV carried out for a client through any of the intermediaries shall be relied upon by all the other intermediaries with respect to the dealing of such client with such other intermediaries. With respect to Mutual Fund clients, IPV carried out by the Know Your Distributor (KYD) registered Distributors who hold valid certifications issued by the National Institute of Securities Market (NISM)/Association of Mutual Funds in India (AMFI) will be valid. For investors who deal under “Direct” broker code (without any distributor), the IPV conducted by Scheduled Commercial Banks can also be relied upon.
12. Is date of birth mandatory to be provided for CKYC compliance?
Yes, the date of birth is mandatory information required for processing of your CKYC application.
13. How would I know that my CKYC application is successful?
KIN is being allotted by CERSAI to investors whose CKYC application is found to be valid. An SMS / email will be sent by CERSAI to the registered mobile number of the investor as soon as the KIN is generated at their end.
14. I do have an email ID / mobile number. How will the KIN be informed to me?
Upon generation of a KIN, CERSAI as a process will communicate the same vide SMS / email provided on the CKYC form. In the absence of both the details, no communication will be sent by CERSAI. Such an investor needs to contact the entity who had processed the CKYC form. You need to provide the details of the supporting documents (for e.g. if PAN copy was submitted as identity proof, then you would need to provide the PAN) that was submitted to the said entity. It is advisable that you provide an email ID / mobile number on the CKYC form so that you do not miss out on any important communication sent by CERSAI to investors.
15. If my CKYC application is rejected / fails, will I be informed about the same?
If the CKYC application is not processed / rejected for some reason, no intimation will get sent to the customer from CERSAI. The entity processing your CKYC application shall be aware of such rejections and can approach in case of any queries.
16. Is CERSAI responsible for validation of investor data?
CERSAI will verify the details as against the supporting documents submitted by investor. However, the onus of doing the CKYC of a customer properly and correctly lies with the entity doing the CKYC.
17. How do I check the CKYC status online?
Currently, such an option is not available. If the investor is allotted the KIN, it is confirmation that the investor is CKYC compliant.
18. I have already obtained a KIN. Do I need to submit any more documents for CKYC compliance?
Investors who are already allotted a KIN are considered as CKYC compliant. Such investors do not need to submit any more documents for CKYC compliance. However, please ensure to keep the KIN details readily available as it needs to be mentioned on the application form at the time of investing.
19. Within how many days will I receive the KIN?
The KIN will be allotted by CERSAI within 2 - 3 working days.
20. I have been allotted a folio for the initial purchase submitted to you along with my CKYC form. However, I have not received the KIN yet. Can I submit another purchase till such time?
Yes, we will be able to accept the same provided you have mentioned PAN details on the CKYC form submitted earlier.
Other important points:
All applications/transactions request are liable to be rejected if the KYC requirements as applicable on the date of investment are not complied with.
Investors/unit holders should further note that the above KYC norms may undergo changes from time-to-time. Hence, investors/unit holders are requested to apprise themselves about KYC applicability before submitting their applications/transactions to avoid rejections.
In case you need any additional information in this matter, please contact us on 18002002434 or e-mail us at email@example.com or contact your distributor for assistance.