The mutual fund industry is moving towards paperless investing. After Reliance and Quantum, Birla Sun Life has introduced electronic KYC (e-KYC) service which aims to expedite the process of client verification and reduce paperwork for distributors.
e-KYC enables fund houses to complete KYC process online with direct authorization from clients. The key objective of e-KYC is to reduce turnaround time and paper work.
All clients need to do is fill up the online KYC form by keying in details like name, mobile number, email id, address, PAN details etc. and upload the supporting documents like PAN, bank details and address proof. The fund house will verify the information and schedule an online meeting with a client based on his/her convenience to carry out electronic In-Person Verification (e-IPV). Once the e-IPV is done, the fund house will send the application to KYC Registration Agency (KRA) to process the documents. Typically, KYC Registration Agencies (KRAs) take 8 to 10 days to verify a KYC application.
By going electronic, fund officials say that KYC can now be done on a real time basis.
In a press release, A Balasubramanian, Chief Executive Officer, Birla Sun Life Mutual Fund said, “Our new 3-step eKYC simplifies the KYC experience for new investors – both domestic as well as Non-Resident Indians. They can get KYC compliant from the comfort and convenience of their location and initiate transactions in a speedy manner. With the nation’s increasing affinity and preference for the online medium, we see eKYC becoming a great enabler for on-boarding new investors to mutual funds. Not only can this facility help grow the industry’s customer base but it can also help mutual fund distributors in growing their business.”
Earlier, SEBI had allowed fund houses to accept e-KYC of UIDAI as a valid proof for KYC verification. However, it has not taken off due to lack of coordination between UIDAI, fund houses and KRAs. Banks and insurance companies are already using Aadhaar linked e-KYC service to carry out their KYC verification procedure. However, many banks and insurance companies insist on submitting physical documents even after carrying out e-KYC.
This initiative can address these issues and provide hassle-free investing experience to investors.
