If SEBI gives the go ahead it may eliminate the need of KYC for mutual fund investments but it’s still a long road ahead
Mumbai: The UPA government’s ambitious Unique Identification Authority of India (UIDAI) project would be of great help for the mutual fund industry if SEBI approves the recommendations of the AMFI committee which is currently working on this project. The committee, headed by Saurabh Nanavati, CEO of Religare Mutual Fund met on March 23, 2011 to chalk out a plan for the same.
“The project is on. We are still discussing it. We will make a presentation to SEBI,” said Nanavati.
“The details are still being worked out. It’s a good thing if it serves as a single database of all investors for the industry. I hope the project is successful and all Indians opt for UID,” says Sundeep Sikka, CEO, Reliance Mutual Fund.
Under the UID project, all Indian residents including minors and infants will receive a 12 digit unique number. The UID will eliminate duplicate and fake identities in government and private databases.
“They are examining whether it can be of some additional help for fund houses,” said an official who is a member of this committee.
Currently all financial services like insurance, DP accounts, and mutual funds require KYC compliance.
From 1st January 2011, SEBI made it mandatory for all investment sizes in mutual fund to comply with KYC norms. The UID may eliminate the need of KYC if the database could be accessed by registrars of mutual funds. The UID number stores biometric, demographic, photograph, iris, and fingerprint, among other details.
“The government has only started allocating the numbers late last year. If the industry can use it for KYC it would be of great help to investors,” said a top official from an R&T.
