The mutual fund industry is moving towards paperless investing. Reliance and Quantum have introduced electronic KYC (e-KYC) service which will expedite the process of client verification and reduce paperwork for distributors.
e-KYC enables fund houses to complete KYC process online with direct authorization of clients. The key objective of e-KYC is to reduce turnaround time and paper work.
All your clients need to do is fill up the online KYC form by keying in details like name, mobile number, email id, address, PAN details etc. and upload the supporting documents like PAN, bank details and address proof. The fund house will verify the information and schedule an online meeting with a client based on his/her convenience to carry out electronic In Person Verification (e-IPV). Once the e-IPV is done, the fund house will send the application to KYC Registration Agency (KRA) to process the documents. Typically, KYC Registration Agencies (KRAs) take 8 to 10 days to verify a KYC application.
Both Reliance MF and Quantum MF provide this service completely online.
By going electronic, fund officials say that KYC can now be done on a real time basis.
In a note sent to Cafemutual, Bhalchandra Y Joshi, Chief-Service Delivery and Operations Excellence, Reliance MF claims that his fund house is the first to launch this service in the mutual fund industry. He said that customers can not only complete the e-IPV (through real time video chat based verification) but can complete the first purchase process also real time.
He further said, “A large section of India is still not investing in mutual funds. One of the impediments to investing in mutual funds is the clunky paperwork required both for application and KYC formalities. This is now being addressed through mutual fund investments in a completely paperless manner which makes for a great customer on-boarding experience. NRIs who are willing to invest in India’s growth story and find KYC process as a show stopper can now invest in Reliance Mutual Fund from anywhere and anytime in the world. The e-KYC route can be a game changer going forward. In fact, we have started receiving overwhelming responses.”
In a press release, Jimmy Patel, CEO, Quantum MF said, “e-KYC will make investing simpler and faster for investors. We have focused on ensuring that the first step of investment is very convenient and a completely paperless experience for new investors.”
Earlier, SEBI had allowed fund houses to accept e-KYC of UIDAI as a valid proof for the KYC verification. However, it has not taken off due to lack of coordination between UIDAI, fund houses and KRAs. Banks and insurance companies are already using Aadhaar linked e-KYC service to carry out their KYC verification procedure. However, many banks and insurance companies insist on submitting physical documents even after carrying out e-KYC.
This initiative can address these issues and provide hassle free investing experience to investors.
