Executive Summary – eKYC is electronic Know Your Customer. MF investors can visit the CAMS website and get an eKYC done. eKYC can be done in 2 modes – OTP eKYC and biometric KYC. You can invest only in electronic mode if you have an OTP eKYC and your investment amount will be restricted to Rs. 50,000. eKYC is a step by the government to reduce hassles for the investor and bring in more convenience to MFs and distributors to conduct their business.
KYC stands for 'Know Your Customer'. It is a process whereby the banks and financial institutions get and maintain information about the customers. This step is to prevent misuse of banks' services by people. If the banks know the identity of people using the banks services, they can know their customers and their financial transactions better and manage risks. KYC, a mandatory policy now has the objective of preventing money laundering, identity theft and financial frauds. KYC is needed to open bank accounts, make remittances above a certain amount and purchase and sale of many investment products.
KYC involves documentation and tedious processes. Customers and financial institutions were unhappy with the process.
The government therefore launched eKYC. It stands for electronic KYC. It is paperless KYC. It is based on Aadhaar. If you have an Aadhaar card, you can authorise UIDAI to release your identity proof and address proof to the bank/financial institution. The government has tried to simplify the process. Earlier the physical process took about 3-4 days to complete. eKYC can be done instantaneously. eKYC for Mutual Fund transactions requires the PAN number too.
"Easy new way to fulfil KYC norms using eKYC to open a bank account or conduct MF transactions. Visit www.camsonline.com to get your eKYC done."
3) How do I get eKYC for MF transactions done?
Visit the website www.camsonline.com.
Enter your email ID and other details such as AMC, Bank name, PAN, DoB etc. Your KYC details are checked. You can then enter your Aadhaar number. You will get a One-Time-Password (OTP) on your cellphone. Use it for authentication. Complete e-sign and your eKYC is completed.
If you want more freedom in your MF Transactions, you should do the biometric based eKYC. Here you go to a CAMS Investor Service Centre (CAMS Centres having biometric facility). Your thumb impression is scanned. After verification, the bio key will be displayed. You should enter the Aadhaar number and Bio key and complete the eKYC process.
5) What are the advantages of eKYC?
eKYC will help investors to invest in Mutual Funds more easily and in less time. It will help distributors reduce costs and get new customers more easily. But there are restrictions on OTP eKYC. Distributors and Investors should be aware of them and follow the process as prescribed.
6) Which Mutual Funds provide eKYC?
Quantum Mutual Fund and Reliance Mutual Fund have launched eKYC facility. It is expected that most mutual funds will soon extend this facility to their customers.