Jan 16, 2017 3 min read

Will C-KYC Simplify the Investments in Mutual Funds?

Centralised KYC will bring a positive change and growth prospects in the mutual fund investments. Read this blog to know how.
The Central-KYC registry providing a one-time completion of the KYC (Know Your Customer) guidelines is slowly progressing and is expected to get stated from February 1, 2017. This has made various players in the mutual fund industries to upload the details of customer KYC details. This would be helpful for the investors to reduce the wasteful task over and over again. Here we will come to know how Centralised KYC (CKYC) will be beneficial for the investors of mutual funds.

We have already provided you with the basic details and impact of C-KYC on the finance system of the country in our earlier post “Centralised KYC (CKYC)- Upcoming Boost in Indian Finance System”. With the implementation of this uniform registry for KYC at the central level it would become easier for the brokerage firms, depositories, financial institutions to serve their customers without asking for the KYC documents again and again. But the matter that needs to be considered here is that what impact it shall have on the lives of the investors. Here are the broad parameters with which you can conclude the benefits of C-KYC.

1. Wide Scope

At present, for every area of investment, investor is required to furnish the KYC documents every time. Even in the case of opening a stock broking, the individual is required to complete the the requirement with various players. In the case of mutual fund investments as well, until the investor is KYC compliant, s(he) is not eligible to invest in the mutual fund investment schemes. But now, with this upcoming change in the system, these barriers will break and the same KYC done for one investment could be used for making further investments as well. Accordingly, the scope for usage is widened with CKYC.

2. Benefiting Mutual Funds

Investors get indulged in different investments as per their investing needs and style and repeating the KYC process becomes a bit painful for them. In case of mutual funds wherein multiple investments are made and closed across a large number of schemes and fund houses, the usage of KYC is the highest; and with the implementation of Centralised KYC, the process for mutual fund investors would be simplified. They would be enabled to make multiple transactions by going through a one-time CKYC. Henceforth, since investments in mutual funds need to have KYC process, the details uploaded will ensure that it will not be required to be completed again.

3. Uniform Updating

This has to be ensured by the mutual fund investors that they have furnished the accurate details for the KYC process and that this has been updated correctly wherever required. Accordingly, same information of the individual investor will be used by all the financial players in the investment market which include banks, brokers, mutual funds, and regulatory bodies. The duplication of KYC shall be reduced to a great extent and the entire system shall become transparent. The time and efforts will be saved and would be used further for effective tasks.

By making the entire system transparent enough, central registry will help the investors to focus on their investments rather than getting indulged in the same KYC process repeatedly. Moreover, when the investment process will get simplified, investors will make more efforts to park their hard-earned money in better plans and as a result, the mutual fund industry will flourish.

We can conclude here that the CKYC will definitely give better growth to the mutual fund investments in the upcoming period. If you need any assistance to get your e-KYC done or want help to file C-KYC with effect from February 01, 2017, you can avail our online services for free. MySIPonline is focused on providing every solution for making worthy investment in mutual funds.