MF News KYCs of 13.50 lakh MF investors are ‘on hold’

KYCs of 13.50 lakh MF investors are ‘on hold’

Only 3% investors have been affected by KYC issue: AMFI

Nishant Patnaik & Riddhima Bhatnagar May 9, 2024

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AMFI said that the KYC of 3% mutual fund investors have been put ‘on hold’ by KYC registration agencies (KRAs).

A rough estimates shows that 13.50 lakh investors could be facing disruption in transaction due to the KYC issue. As on March 2024, the MF industry had 4.45 crore investors.

Venkat Chalasani, CEO, AMFI said, “With regards to the KYC norms with effect from April 2024, the mutual fund industry is addressing concerns for a smooth process. Together with AMCs, distributors and other stake holders, we are committed to facilitating a seamless KYC validation process for all, thereby ensuring the integrity and accessibility of mutual fund investments across the board."

According to the SEBI norms, KRAs have validated all KYC details of capital market investors. As part of this activity, KRAs have identified investors based on officially valid document (OVD) like Aadhaar, passport, driving license, voter ID and so on. KRAs also validated email id and mobile number before putting a validation tag on KYC status.

As a result, KRAs have assigned three statuses to KYC - Validated, Registered and On Hold.

Investors with validated tag will not have any problem in executing financial or non-financial transactions.

While investors with ‘registered’ tag will have to submit KYC documents again when they want to invest in new security or new mutual fund, investors with ‘on hold’ KYC status will have to revisit their KYC completely.

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14 Comments

KEVAL JETHI · 6 months ago `

New issue we are facing it that name is not matching with ITD portal.

ANURAG DUREHA · 6 months ago

Is INCOME TAX DEPTT aware that there are mismatches in their own records ? I have examples where the name on PAN, IT Return and database with Income Tax - all three are different. They say that the name should match with the name as per IT records. How do we know what do IT records say ? Are they interested in MF investments or want to play a PUZZLE GAME ?
Are SEBI and AMFI also aware of this scenario ? Will the voice of MFDs ever reach them or the investors have been left to shed tears on their fate ?
Oh GOD !!! Please come down to rescue us.

Sreenivas Dara · 6 months ago `

One of my clients KYC is in Validated status. But transaction of Purchase in Existing AMC has been declined due to name in ITD differs. Atleast existing AMC transactions should be allowed in these cases.

SEBI should have given enough of time and inputs regarding these changes and remidition processes. AMFI should work on it. We are in full of confusion.

Some sources saying in PAN Name Mis match cases, transactions are allowed in existing AMCs. But CAMS rejects such transactions also.

ANURAG DUREHA · 6 months ago

AMFI and SEBI have to accept that only investors and/or MFDs are not liable for this long list of 13.50 lacs ON-HOLD-INVESTORS. They need to see the procedures/correctness at KRA/RTA/AMC side also. I am sure a very large number, out of 13.5 lacs, will be removed from the ON-HOLD list.
Closing their eyes to the real problems will not enable AMFI/SEBI to reach anywhere. Only the investors and MFDs are going to suffer and may be...investors will slowly prefer to avoid investments in MFs.

V Khawani · 6 months ago `

Some of my clients KYC status have been put on hold despite doing Re - KYC online, writing their names exactly according to their PAN card and submitting Aadhaar as address proof. Their KYC modification request has been rejected. The reason for the same is name mismatch ! What should we do ? Can anyone clarify ?

ANURAG DUREHA · 6 months ago

Pl read my response above. Name as per PAN is also not matching the name on Income Tax records.

Laxmikant · 6 months ago

Name as per PAN need not always match with IT Records.
While creating new PAN, there is an option to specify "Name to be printed on Card". If the applicant gives different name here, then such problems arise.

Prudent Wealth · 6 months ago

correct

Rajendrra Bisshtt · 6 months ago `

Direct clients??how they will do??

Prudent Wealth · 6 months ago `

Cafemutual should help us raise few question with SEBI & KRA

1. Video KYC done with aadhar first shows validated then after few days it is getting HOLD due to " HOLD due to unable to Aadhar XML file"
2. Old age investor who does not have email id and uses landline only what about there KYC , is old age investor denied from Investment.
3. What QC is done by KRA for correctness of data entry , as in some cases email id and phone no are wrongly captured.
4. NRI KYC has to be eased as getting letter from embassy is tiresome process.
5. We have to indvidually email to respective KRA for Hold removal for getting the KYC reprocess which is taking a week time. why not HOLD is automatically removed when fresh KYC application is given.

Arun Chaitanya · 6 months ago `

We should be able to do porting from different kyc agencies as NDML is horrible

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