Last Updated on Sep 1, 2021 by Manonmayi

‘KYC’ – Know Your Customer, has become a buzzword in the financial world. Whether you open a bank account, use mobile wallets, opt for phone or gas connections or do any other type of financial transaction, you are required to complete the KYC formalities. So, it should come as no surprise that mutual fund transactions also include KYC formalities.

The article covers:

Mutual fund KYC – the concept

The Prevention of Money Laundering Act (PMLA) was passed in the year 2002 to put an end to money laundering activities, i.e. turning black money into white money through legal routes. The Act was made applicable for financial institutions so that their transactions can be verified. In keeping with the objective of the PMLA, the Securities and Exchange Board of India (SEBI) issued directives to mutual fund companies to incorporate the provisions of the PML Act. This gave birth to the concept of mutual fund KYC.

So, when you invest in a mutual fund scheme or carry out any mutual fund transactions, you are required to comply with the applicable KYC formalities. You are required to fill up a KYC form and submit the relevant documents that authenticate your identity and establish your background.

Mutual fund KYC – why is it needed?

SEBI has mandated the KYC formalities for mutual fund transactions. So, if you want to invest, switch or even redeem mutual fund units, you have to complete the KYC formalities. Here’s a look at the ‘why’ of the mandate:

  • Mutual fund KYC ensures that you are investing legal money into the mutual fund scheme. It also helps establish the fact that you are not using the mutual fund avenue to launder illegal money or to route your black money into the economy.
  • With KYC, mutual fund companies can weed out fake or fraudulent investors.
  • With the help of KYC, mutual fund companies can also check into the background of its investors. This helps companies keep a check on criminal activities.
  • If there is any illegality discovered in mutual fund transactions, the source of such acts can be easily traced. KYC helps AMCs, as well as the judicial authorities, establish the identity of the investor.

Given these reasons, mutual fund KYC is a must.

How can you get the KYC done?

There are two ways to get your KYC done – the online mode and the offline mode. The online mode of KYC is called e-KYC and it allows you to invest amounts up to Rs 50,000. If you want to invest more, the offline KYC is a must wherein an In-Person Verification is done.

Moreover, to ensure uniformity in KYC formalities, SEBI has introduced the concept of uniform KYC. The KYC form is the same across every AMC. You need to complete the KYC formality once and then it is inter-used for all mutual fund transactions that you do with multiple AMCs.

So, here’s the KYC process:

Online process

You can complete the online KYC for mutual fund with any AMC, SEBI certified brokers or intermediaries or the KYC Registrar Agency (KRA).  The process for e-KYC is as follows:

  • Download and fill up an online KYC form
  • Upload your KYC documents

Once you submit the documents online, the e-KYC would be completed. You would get a message on your registered mobile number and email address to complete KYC.

Offline KYC

Under this process, you are required to submit a physical KYC form along with self-attested copies of your KYC documents. You are also required to do an In-Person Verification (IPV) with a SEBI-registered intermediary, a NISM or AMFI certified distributor who complies with the KYD norms or with specified scheduled commercial banks.

Once you submit the filled and signed KYC form along with your documents and complete the IPV, you would complete the offline KYC process.

This KYC formality is required once. Thereafter, your KYC details would be held in a central database called the Central KYC Registry (CKYCR). The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) acts as the CKYCR and maintains your KYC records. These records are, then, inter-used by different AMCs whenever you conduct mutual fund transactions.

Documents needed for mutual fund KYC

Now that you know the meaning, importance and ways to do mutual fund KYC online and offline here is the all-important part – the documents needed.

A valid KYC is completed when you submit the following documents:

  • The KYC form, filled and signed 
  • Self-attested copy of your PAN card (this is a mandatory requirement. No PAN Card, no KYC!)
  • A valid proof of identity like your Voter’s ID Card, Driving License, Passport or Aadhaar card
  • A valid proof of address like your Rental Agreement, Property Sale Deed, Driving License, Aadhaar Card or Passport
  • In the case of NRI, OCI or PIO investors, a copy of the OCI or PIO card, a copy of the passport and the address proof of the country where they reside would be required

Important points to note

  • If the mutual fund investment is in the name of a minor, the KYC documents of the legal guardian or the parent managing the scheme would be needed. When the minor attains 18 yrs of age, the account would vest in their name and KYC of the holder would be needed.
  • In the case of HUFs, the copy of the PAN card of the HUF, attested by the Karta would be needed
  • For NRIs, the copy of the PAN card should be attested by authorized signatories
  • If there is a Power of Attorney, the issuer and the Constituted Attorney should fulfil the KYC process
  • In the case of joint account holders, the KYC of each account holder is a must

Checking the mutual fund KYC status

Just like you can do online KYC for mutual funds, you can also check the status online. Visit any KRA website, enter in your PAN card number and other details and the KYC status would be displayed. Currently, there are 5 authorized KRAs through which you can check your KYC status. They are as follows:

  • CAMS
  • CVL
  • Karvy
  • NSDL
  • Dotex

So, complete the KYC formalities before you start your mutual fund investments. It is a simple, one-time process that helps you transact in mutual funds effortlessly.


1.   I have invested in mutual funds many years ago when KYC was not required. I want to redeem my fund. Is KYC needed?

Yes, even if you invested without the KYC norms, for any further transaction in mutual funds, KYC would be needed.

2.   Can I opt for Aadhaar based KYC?

Yes, Aadhaar-based KYC is also available wherein you need to enter your Aadhaar card number to complete the KYC process through Aadhaar-generated OTP.

3.   What is the cost of the KYC process?

The KYC process is completely free of cost. There are no charges involved with it.

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