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In a recent circular, SEBI asked KYC Registration Agencies (KRAs) to upload verified KYC details of all investors in Central KYC Records Registry (CKYCRR) starting from August 1, 2024.
CKYCRR is a single know your customer (KYC) system that can be used across all financial transactions like banks, mutual funds, stocks, insurance, and NPS. This move is aimed to implement uniform KYC in the financial services industry.
Cafemutual spoke to MFDs to understand what they expect from the uniform KYC structure.
Delhi MFD Retd. Col. Sanjeev Govil of Hum Fauji Initiatives feels that while the concept of uniform KYC is good, implementation in practicality may be a challenge. He said, “The existing KYC system has been a headache for investors and distributors for a long time now. If the CKYC is implemented, it will be a big relief for investors who are submitting KYC documents multiple times for bank FD, mutual funds, insurance. However, CKYC in the current form doesn’t work properly. There are instances where OTP does not come on time. It is interesting to see how uniform KYC will fix these teething issues.”
Noida MFD Akta Sehgal of Manas Wealth believes that uniform KYC process can save a lot of time of MFDs. She said, “Currently, the administrative part of mutual fund investment is very annoying for the investors. Even simple tasks like email registration and Aadhar updation takes days. A successful implementation of a uniform KYC can be game changer for the industry.”
Pune MFD Balvir Chawla of Finnovator Solutions pointed out the issues faced due to different timelines of KRAs. He said, “Currently, different KRAs are validating documents with their own timelines, which is why the response time for the process keeps changing. A central KYC process would solve such problems and make the process smoother for the distributors and investors.”
Pune MFD Ashwin Kanuga of Autus Wealth also pointed out various flaws in the current KYC process while expressing optimism about CKYC. He said, “Currently, there are a lot of issues with KYC process like PAN-Aadhar linking, updation process for NRIs, issues with income tax, no streamlining of name in a state like Maharashtra etc. This process becomes even more difficult for senior citizens due to the long process that goes through 5-6 authorities. However, CKYC is working well although I believe there is shortage of manpower required to make the process better. Streamlining of this process would reduce a lot of hassles.”
