The government’s ambitious central KYC (CKYC) goes live from tomorrow. This means that a single bank KYC will suffice to invest in all financial products, including mutual funds. This was announced in the Union Budget 2012-13.
While IRDAI and RBI have instructed their respective regulated entities to upload KYC data of new individual accounts opened on or after July 15, 2016 on the DotEx platform, the MF industry is awaiting a circular from SEBI on the same.
This essentially means that all investor data will be stored at one place which can be accessed by all financial institutions to verify the KYC. All investors need to do is obtain a central KYC number from Central KYC Registry through the financial institutions and use it to invest in any financial product. There will be no need to do multiple KYC.
In a circular issued yesterday, IRDAI has instructed insurance companies to upload electronic copy of the client's KYC records with the Central KYC Records Registry. Similarly, RBI has come out with a similar circular asking banks to upload this data from July 15.
The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) was entrusted with the task of setting up the Central KYC Registry. CERSAI has appointed DotEx International Limited, a NSE group company, as its managed service provider for the Central KYC Registry.
CERSAI has finalized KYC template for individuals and issued operating guidelines for institutions for uploading KYC records. “Institutions will have to upload the KYC data of new customers in bulk on our platform from tomorrow. The uploading of data may take some time as both (institutions and our) systems should match,” says Mukesh Agarwal, CEO, IISL & DotEx.
Fund officials say that this will be a game changer for the MF industry. They say that this will help distributors onboard MF investors faster.
“We are expecting a circular from SEBI. We need some clarity on whether we have to continue to upload data on both KYC Registration Agency (KRA) platform and DotEx platforms. Once central KYC is fully operational this will be the greatest benefit for the mutual fund industry,” says Jimmy Patel, CEO, Quantum AMC.
Srikanth Meenakshi, COO, FundsIndia.com is of the view that single KYC will help distributors in a big way. “Almost all people who invest in mutual funds have a bank account or an insurance policy. This would make KYC procedure smoother and easier which will eventually help reduce turnaround time to onboard a new client. However, we have to see how the new system integrates KYC data and how it will enable intermediaries to use it.”
