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Many MFDs have been witnessing that the KYC registration agencies (KRAs) have put KYC of their NRI clients ‘on hold’ due to invalid mobile number.
These clients cannot do fresh investment including SIPs or redeem money until they resolve this issue. Earlier, SEBI had asked KRAs to validate email id and mobile number of all investors including NRIs.
Let us understand this issue from three different scenarios:
- Existing NRI investors who have quoted 10-digit Indian mobile number on KYC form
- Existing NRIs who have quoted foreign mobile number on KYC form
- And existing NRIs who did not give any mobile number on KYC form
Existing NRIs who have quoted 10-digit mobile number on their KYC
NRIs who have quoted the then 10-digit Indian mobile number on their KYC form are affected by the email id and phone number validation process.
KRAs have been validating both email IDs and phone numbers of all clients including NRIs who had quoted 10-digit Indian mobile number and flagging ‘on hold’ on KYC if it is not verified through OTP.
This happens when existing NRIs have changed their Indian mobile number or their number is no longer valid.
In this case, NRIs will have to update their KYC with the new Indian mobile number. Currently, Indian mobile number is compulsory for them.
If they don’t have a valid Indian mobile number, MFDs may ask NRI clients to share phone number of any family member having active Indian SIM card along with a declaration form.
If your client is not comfortable sharing others phone numbers, you may request them to apply for eSIM with any telephone operator. However, this too requires the physical presence of your clients.
Overall, quoting a valid Indian 10-digit mobile number is mandatory for NRIs whose KYC has been put ‘on hold’.
While AMFI has reportedly approached SEBI to do away with the requirement of Indian mobile number for all NRIs, the market regulator is yet to come back.
A senior MF official told Cafemutual that many NRIs do not have local address and Indian mobile numbers. “AMFI has already reached out to SEBI listing a host of practical problems related to NRI investments. The industry has requested SEBI to relax KYC norms pertaining to requirement of local address and Indian mobile number. However, SEBI is yet to come back on this.”
Existing NRIs who have quoted foreign mobile numbers on KYC form
These investors are exempted from email id and phone number validation process. However, their PAN has to be flagged as NRI PAN.
If such an investor has faced ‘on hold’ KYC issue, they will have to remediate their residential status in PAN along with ITR.
Existing NRIs who did not quote any mobile number on KYC form
Again, NRIs with NRI PAN are exempted from this and they can continue to invest in mutual funds without any disruption.
Please note that the exemption is applicable for both existing and new investors.
