KYC norms hit SIP inflows in January

New KYC norms seem to have slowed down SIP registrations. However, the industry is confident that this is just a short-term glitch and new SIPs will continue to grow

 Mumbai: Fresh SIP registrations have been on a slow track in January as investors and distributors tried to comply with the new KYC norms.  In the year ending December 2010, more than two lakh SIP accounts were opened. In January 2011, around 1.35 lakh SIPs registrations were recorded, signaling a sizeable decline of 39% compared to December. During the corresponding period of last year (January 2010), 1,76,450 SIPs were opened.

Just a short term glitch: MF officials

However, this seems to be a short time glitch for the MF industry. The inflows, especially through SIPs are expected to see steady growth going further, say fund officials.

“KYC has become mandatory now so there has been a decline in fresh SIPs in the month of January. The situation will improve in February and March. In fact January has been a positive month in terms of the net inflows in equity,” said Prabal Nag, vice president, Business Development, CAMS.

“We have seen a decline in SIPs inflows in January. It’s definitely because of KYC norms,” said Srinivasan Jain, Chief Marketing Officer, SBI Mutual Fund.