What is the KYC process in mutual funds?

KYC, or Know Your Customer, is a process that financial institutions use to verify the identity of mutual fund investors. The primary purpose of the KYC process is to prevent fraud, money laundering, and terrorist financing. In this article we will understand what is KYC process, its meaning and definition, particularly in the context of mutual fund investments.

So, what is the KYC process? The KYC process definition can be understood as a set of procedures designed to prevent the abuse of financial services. These processes include customer identification, customer due diligence, risk management, and ongoing monitoring of transactions. This process is mandatory for all financial transactions, including mutual fund investments. The mutual fund KYC process is regulated by the Securities and Exchange Board of India (SEBI) to ensure transparency and security in the investment process.

• Table of contents

1. The KYC process involves several steps
2. Mutual Fund KYC - Latest Update in 2025
3. Can I do KYC online for a mutual fund?
4. From when is it mandatory for an investor to be KYC compliant?
5. How to do KYC for mutual fund online
6. How to do KYC for mutual fund offline
7. How can NRIs update KYC status for mutual fund investments?
8. Important things to keep in mind
9. Documents required for Mutual Fund KYC
10. How can I check my mutual fund KYC status?

The KYC process involves several steps:

• First, the investor must provide personal information such as name, address, date of birth, and contact details.
• This information is then verified using government-issued identity proof like a PAN card, Aadhaar card, or passport.
• The investor also needs to provide proof of address, which can be a utility bill, bank statement, or rental agreement.

The KYC process meaning lies in its ability to establish the identity of the investor and understand their financial dealings. This process helps mutual fund companies to ensure that the investments are made by legitimate investors.

Investors can complete the KYC verification process online or offline. The offline method can take up to a week for completion. However, the online method is quicker and can be done through Aadhaar-based biometric KYC or Aadhaar linked OTP.

Investors can check the status of their KYC application online through the official website of the KYC Registration Agencies (KRAs) or mutual fund houses. However, KYC is subject to periodic reviews, and investors may be required to undergo a re-KYC process after some time to ensure that their information is up to date. Moreover, SEBI has mandated the use of Aadhaar and PAN authentication for KYC validation post April 1, 2025.

In the context of mutual fund investments, the KYC process is essential for two reasons. First, it helps mutual fund companies to comply with regulatory requirements and evaluate investor credentials. Second, it helps to protect the interests of investors by encouraging compliance and preventing illegal financial activities. Therefore, it is essential for all investors to understand the KYC process, its meaning, and its definition before investing in mutual funds.

Mutual fund KYC: Changes announced in 2025

In 2025, SEBI announced new guidelines according to which investors had to ensure they were ‘KYC Validated’ for subsequent mutual fund transactions. The guidelines were as follows:

• All mutual fund investors must update their KYC by March 31, 2025, if it was initially done without an officially valid document (OVD) such as a passport, driving license, or voter ID.
• Utility bills were previously accepted as address proof for KYC, but new norms now require documents like a passport, driving license, or voter ID.
• If KYC was originally done using an OVD other than Aadhaar, existing investments remain unaffected, but re-KYC is necessary for investing in a new fund house.
  • Once KYC is done through Aadhaar, investors can invest across fund houses and no further re-KYC will be required.
• Investments made with passport, driving license, or voter ID-based KYC will not be impacted, but those based on utility bills may face restrictions.
• To ensure uninterrupted transactions and investments, investors should complete KYC updates before April 1, 2025.
• Investors should first check their KYC status to determine if re-KYC is required.

Can I do KYC online for a mutual fund?

Investors can complete their KYC (Know Your Customer) process online for mutual fund investments in India. It's important to use authorized and registered platforms for KYC and avoid sharing personal details with unverified sources.

How to do KYC for mutual fund online

Here’s a step-by-step guide to complete KYC process entirely online:

Select a KYC registration agency (KRA): SEBI authorizes several KRAs to process KYC. Commonly used KRAs include CAMS KRA, Karvy KRA (Kfintech KRA), CVL KRA, and NSE KRA. You can choose any KRA to initiate your KYC.

Access the KRA’s website: Visit the official website of your chosen KRA. Locate the section for online KYC or eKYC.

Submit PAN details: Enter your PAN number as prompted. The system will verify your PAN details.

Provide necessary information: Fill in your name, date of birth, and contact details. Ensure these details match those on your PAN card and address proof.

Upload required documents: Upload scanned copies of your PAN card and address proof. Documents should be clear and readable. Some KRAs offer Aadhaar-based eKYC, which may be faster.

Verification and KYC approval: After document and in person verification, your KYC will be registered. You will receive a confirmation message or email. Your KYC status will be updated across all KRAs.

Check your KYC status: You can check your KYC status later on any KRA website to ensure completion.

How to do KYC for mutual fund offline

Obtain the KYC form: Download the KYC form from the website of any KYC registration agency (KRA) such as CAMS KRA, Karvy KRA (Kfintech KRA), CVL KRA, or NSE KRA. Alternatively, you can collect the form from a mutual fund distributor or a branch of a mutual fund company.

Fill out the KYC form: Provide all required details, including personal information, PAN, and address. Ensure the details match those on your supporting documents.

Gather supporting documents: Provide a self-attested copy of your PAN card. Submit a self-attested copy of a valid address proof, such as an Aadhaar card, passport, driving license, or voter ID. Carry the original documents for in-person verification.

Submit the form and documents: Submit the filled KYC form along with the self-attested copies of your documents to your chosen mutual fund house or intermediary at their office. Ensure you receive an acknowledgment receipt for your submission.

How can NRIs update KYC status for mutual fund investments?

Steps for NRIs to update KYC:

Check KYC status: Visit a KRA website to verify your current KYC status and determine if updates are needed.

Gather required documents: Ensure you have valid documents, including a passport, OCI/PIO card, and proof of overseas address.

Online or offline update: Depending on the KRA and specific circumstances, updates may be completed online or require offline submission.

Contact KRAs or AMCs: If uncertain, NRIs can seek guidance from KRAs or the Asset Management Companies (AMCs).

Required documentation:

NRIs typically need the following documents: Passport, Overseas Citizen of India (OCI) or Person of Indian Origin (PIO) card, Proof of overseas address, and PAN card.

NRIs may also be required to provide proof of their NRI status, such as a copy of their visa or work permit. These documents must be attested by authorized entities, including the Indian Embassy, Consulate, Notary Public, or officials from overseas branches of scheduled commercial banks registered in India.

Important things to keep in mind

Mandatory requirement: KYC is required for all mutual fund investments in India, regardless of the investment amount.
A valid PAN (Permanent Account Number) is a key document for completing KYC.

Accuracy of information: All details provided in the KYC form and supporting documents must be accurate and consistent to avoid delays or rejection.

Single KYC validity: KYC done with Aadhaar is valid across all mutual fund companies, eliminating the need for repeated verifications.

Documents required for Mutual Fund KYC

To complete KYC for mutual fund investments, proof of identity and proof of address must be submitted. Below is a detailed list of acceptable documents.

PAN card

Proof of address (POA). This can include:

• Aadhaar card
• Passport
• Driving license
• Voter ID card
• Bank passbook
• Other government-issued identity considered to be an officially valid document.

How can I check my mutual fund KYC status?

Checking your mutual fund KYC status is a simple process. Follow these steps to verify your status online.

Identify the KRAs: Several KYC Registration Agencies (KRAs) are authorized by SEBI, including CAMS KRA, Kfintech KRA (formerly Karvy KRA), CVL KRA, and NSE KRA.

Visit a KRA website: Go to the official website of any of the KRAs. All KRAs provide an online KYC status check.

Locate the KYC status check section: Look for a section labeled "KYC Status," "Check KYC," or similar.

Enter your PAN: You will be asked to enter your PAN (Permanent Account Number). Ensure that the PAN is entered correctly.

Submit and view status: After entering your PAN, submit the request. Your KYC status will be displayed on the screen.

Understand the KYC statuses:

KYC validated: Your KYC is complete and valid.

KYC registered: Your KYC is registered but not validated

KYC on hold: There may be discrepancies or missing information in your KYC documents. Additional documents may be required.

KYC rejected: Your KYC application has been rejected, and you will need to reapply.

Conclusion

Completing the KYC process is essential for investing in mutual funds in India. By ensuring your documents are in order and following the required steps, you can simplify the process. Whether opting for online or offline KYC, keeping your status updated and monitoring regulatory changes will help maintain smooth and compliant investments.

FAQs:

What is KYC, and why is it required for mutual fund investments?

KYC, or "Know Your Customer," is a mandatory process to verify an investor's identity and address. It helps prevent money laundering and ensures compliance with regulations. For mutual funds, KYC is necessary to establish investor credibility and maintain transparency in financial transactions.

How can I complete my KYC for mutual funds online?

KYC can be completed online through KRA (KYC Registration Agency) websites or mutual fund portals. Investors need to submit scanned copies of their PAN card, Aadhaar card, and a photograph. Some platforms also provide video KYC for real-time verification.

What documents are required for mutual fund KYC?

A PAN card, an Aadhaar card (recommended for seamless KYC), and a passport-sized photograph are typically required. Bank statements and utility bills are no longer considered valid address proof.

What is KYC form in mutual fund?

A KYC form captures an investor's personal details, including identity, address, and financial information. It is a standard regulatory requirement for verifying investor credentials. Completing the KYC process ensures compliance and facilitates seamless mutual fund transactions through KYC registration agencies (KRAs).

Is KYC mandatory for all mutual fund investors?

Yes, KYC is required for all individuals investing in mutual funds in India, regardless of the investment amount or type of fund. This regulatory mandate ensures investor verification and helps prevent financial misconduct.

Can NRIs invest in mutual funds without completing KYC?

No, NRIs must also complete KYC to invest in Indian mutual funds. The process may vary slightly and may require additional documents such as a PIO/OCI card or overseas address proof. Both online and in-person KYC options are available for NRIs.

How long does it take to complete the KYC process?

The online KYC process is usually completed within a few days. However, the verification timeline may vary based on the KRA and document processing. Delays can occur if the submitted documents are incomplete or contain errors.

How can I check my mutual fund KYC status?

KYC status can be checked on the websites of KYC Registration Agencies (KRAs) in India, such as CVL KRA, CAMS KRA, KFintech KRA (formerly Karvy KRA), NDML KRA, and NSE KRA. You will typically need your PAN card number to access the status.

What happens if my KYC details are outdated or incorrect?

If your KYC details are outdated or incorrect, your mutual fund transactions may be restricted. This could prevent you from making new investments or redeeming existing holdings. Keeping your KYC updated is essential for smooth investment activity. Reach out to your KRA or mutual fund house to correct any discrepancies without delay.

Is KYC necessary to use an SIP return calculator for mutual fund investments?

While KYC is mandatory for investing in mutual funds, using an SIP return calculator typically doesn't require KYC, as it's a tool for estimating potential returns based on provided inputs.

Do I need do KYC to do a step up SIP?

If you are not KYC validated and do not have an existing folio with the fund house, you would typically be required to do your KYC. If you're planning a step up SIP, a step up SIP calculator can help you finetune your investment strategy.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This document should not be treated as endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.