One of our clients wrote to us with this query:
We have a mutual fund distribution company and currently, we are developing an online app for investors. We would like to on board new clients within a few minutes through eKYC. Can you please help us understand how to go about offering eKYC through our app?
Prasad R Lendwe, FinnovationZ, Noida
Mutual fund distributors can use Aadhaar based e-KYC to onboard clients. To avail this facility, IFAs will have to register with a KYC user agency (KUA) as a sub-KUA. The KUA has to register itself with Unique Identification Authority of India (UIDAI).
Simply put, you will have to use eKYC and video KYC services offered by AMCs and RTAs. Almost all large AMCs offer these services to distributors. In fact, you can tie up with CAMS or Karvy Fintech directly to offer eKYC or video KYC services.
After you register yourself as a sub-KUA with AMCs or RTAs, you can complete Aadhaar-based eKYC of your clients. Here are the steps that your clients need to follow for eKYC:
Direct investors to the website of the KUA (AMCs or RTAs)
Investors need to enter their Aadhaar number or Virtual Id and provide consent on the KUA portal
After this, investor will receive a one-time password (OTP) from UIDAI, which he needs to enter on the KUA website and fill any additional details as required under KYC format
Following successful Aadhaar authentication, KUA will receive the e-KYC details from UIDAI
The AMC or RTA will further forward e-KYC details to you in an encrypted format and display it to the investors on portal
Ensure that the Aadhaar number is not stored anywhere. Wherever required, only the last four digits of Aadhaar number should be displayed. Also, since this would be eKYC, there is a limit of Rs.50,000 per folio per fund house.
You can do video in person verification (IPV) for full KYC. There is no limit to invest in mutual funds if you complete the IPV process.
In a video KYC, you can ask your clients to upload KYC documents such as Pan card, photograph, address proof and a cancelled cheque on AMC website. Once your clients upload these documents, the system will start real time video recording using the front camera on laptop or mobile. Your clients will have to display the uploaded documents for a few seconds to get it done. If this IPV fails, the fund house will call your clients to do it manually through skype.
