SEBI has issued an FAQ in which it has clarified that ‘in-person verification’ or IPV is not required on Aadhaar based e-KYC service for mutual fund investors. Simply put, investors with Aadhaar number and PAN can complete KYC process using Aadhaar based eKYC and open a folio without having to submit forms and IPV.
According to SEBI rules, investors can invest up to Rs 50,000 per financial year per mutual fund using one time password (OTP) through eKYC. However, investors who wish to invest more than this limit need to undergo IPV or biometric based authentication.
In the FAQ released on Aadhaar based e-KYC, SEBI has said, “Verification of the client with UIDAI is carried out through OTP received on client’s mobile number or on email address registered with UIDAI provided the amount invested by the client does not exceed Rs.50,000 per financial year per mutual fund and payment for the same is made through electronic transfer from the client’s bank account registered with that mutual fund.”
A number of fund houses like Reliance, Quantum and Birla Sun life and R&Ts like CAMS and Karvy have launched eKYC service for investors to expedite the process of client verification and reduce paperwork for distributors.
While using eKYC, all investors 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.
Meanwhile, the market regulator has clarified that e-sign linked with Aadhaar is also a valid signature for authentication of a signer.
