The Aadhaar letter issued by Unique Identification Authority of India (UIDAI) could be used for KYC instead of a passport; will serve as a proof of both address and photo identity.
Market regulator SEBI has permitted the use of Aadhaar letter as a proof of address for know your customer (KYC) norms for all market instruments including mutual funds.
“In consultation with UIDAI, Government of India, it has now been decided that the Aadhaar Letter shall be admissible as Proof of Address in addition to its presently being recognized as Proof of Identity,” states the SEBI circular.
“It’s a very good step for the industry. It will help streamline the KYC process,” says Vijai Mantri, MD & CEO, Pramerica Mutual Fund.
While some say that the move will help AMCs in reducing operational hurdles, others are of the view that it is just an additional facility for proof of address.
“Initially it was mooted that Aadhaar will replace PAN. However, now It is an additional facility for KYC. This facility will be helpful over a period of time once the connectivity with UIDAI database is in place. PAN will still be required for KYC because it is a SEBI and the Ministry of Finance requirement. PAN works as a common financial market denominator while UIDAI will work as a KYC enabler. UIDAI will suffice for both as an identity proof and address proof,” said Jimmy Patel, CEO, Quantum Mutual Fund.
The database of all UID holders is stored in the Central Identification Data Repository (CIDR). Fund officials say that the move will be helpful in the long run once the connectivity with government’s database is established.
Presently there are four know your registration agency (KRAs) approved by SEBI which will kick start the common KYC process.
