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Single KYC or uniform KYC is to become a reality soon.
The government will soon introduce single know your customer (KYC) that will be used across financial products like mutual funds, insurance, bank FD, NPS, stocks and so on.
Ajay Seth, Secretary, Department of Economic Affairs said that the government had set up a committee headed by deputy RBI governor to implement single KYC for all financial products and the committee is ready with its recommendations. He said that the government will announce the details soon. Seth said this at a recent FICCI event.
Currently, a separate KYC is needed for different financial products. For instance, separate KYCs are required for opening a bank account and investing in mutual funds.
Distributors feel that the existing complications in KYC norms are, to some extent, proving to be deterrent for new investors to invest in mutual funds. This KYC hindrance is a major cause of concern for the MF industry.
If this goes through, it would simplify customer onboarding by reducing the turnaround time to acquire a new client.
While the government launched central KYC (CKYC) registry agency in 2016 to eliminate the need to do fresh KYC for investing across financial assets, the scope of central KYC is limited to the capital markets only. Even after six years, banks and insurers are yet to share KYC details on CKYC platform.
