Listen to this article
Over the last few days, many distributors have been witnessing disruption in MF transactions including SIPs of their clients due to ‘On hold’ KYC issue.
Earlier, SEBI instructed KRAs and RTAs to verify email id and mobile number of all existing investors. SEBI directed KRAs to generate an ID for every investor whose validation is completed successfully.
Following the guidelines, RTAs have been sending OTP on mobile number and email id of existing investors to revalidate both the details.
Then why have been KRAs putting your clients KYC ‘on hold? There are four key reasons:
- If OTP is not delivered to mobile number or email id
- If OTP is not delivered due to invalid mobile number or email id (Usually happens due to spelling mistake or typo in existing KYC details)
- If mobile number or email id is no longer active (Cases where clients have changed mobile number or email id)
- If PAN and Aadhaar are not linked
How to remediate it?
- First step is to do KYC inquiry on any KRA website. This will help you find out which KRA did the KYC of your client or where does the client KYC exist
- Next is verify if PAN and Aadhaar are linked. Refer to this article if both the documents are not linked. Majority of ‘On hold’ KYC issue is due to non-linkage of Aadhaar and PAN
- Once you link both the document, your clients can intimate their KRAs through email or any market intermediary. CAMS has facilitated this link to do it online on real time
- If it is due to mobile number and email id verification issue, visit the respective KRA website. All KRAs have integrated KYC validation link on their website. In any case, you can click on these links to validate KYC – CAMS, CVL, Dotex, Karvy and NSDL. Please note that we did not find the KYC validation link of Dotex KRA
- If there is a change in email id or mobile number, they will have to modify their KYC. This can be done online through any market intermediary platform like fund houses.
- CAMS offers online modification directly for people who have done KYC from them. CAMS also offer interoperability i.e. anyone can modify their KYC irrespective of their KRA. However, such a request has to come from intermediary website like fund houses
As a hygiene factor, in cases where you are anyway modifying KYC due to change in mobile number or email id, insist your client to submit Aadhaar as officially valid document (OVD).
This will enable your clients’ existing KRA to facilitate interoperability i.e. it will help your clients make modification in future through any KRA irrespective of where the PAN rests and that too online with KRAs like CAMS.
In the second series of this article, we will publish an FAQ on issues related to KYC. So, use comment section to post your questions.
