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    By: Bijan Biswal
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    Well the answer is “Aadhaar is certainly mandatory for mutual fund investments”

    On 20 March, 2021, the finance minister of India has progressively delivered a set of standard measures that were the first steps of instalment of things that the government of India will aim to do is to boost the economy. It was a decision based on various parameters. This is vital for the equity markets. The aim is to promote clean money transactions.

    Among the changes which were announced by the Indian FM was one which was a surprise and a very pleasant step is the restoration of details of Aadhaar as a medium of KYC for mutual fund investments for any investors. This is not a new trend or step that has happened. Previously, Aadhaar was absolutely allowable for this purpose, as it was for many other things, before the Supreme Court disallowed it in September last year, because of some claims from few parties. But apparently, with the latest Aadhaar law passed in July this year 2021, it can be used or applied again.

    Type of Mutual Funds and Linking processes

    The main aim of ekyc for mutual fund or Aadhaar-based know your customer method is important because it collaborates investing decisions into the digital age by making instant process, seamless method, paperless onboarding of latest and young investors possible. For those who have been investing since an earlier era, this may look like a minor or very small point. The hdfc mutual fund has made special arrangements to fill up the kyc form and link investors details with aadhaar within no time.

    Earlier these applications were in the form of papers, but now axis mutual fund made it very simple, earlier people used to queue for banking, simple cheque clearing, collecting record-keeping statements, basic unit transfers etc. but now everything is computerized. A good number of investors buys  axis mutual fund, simple they can now link their aadhaar to the mutual fund they are investing upon. Aadhaar-based KYC is specifically meant for mutual funds and the steps are too short. As all the government and private banks are, the steps will legally commit to assure and provide foolproof KYC, everything this is crystal clear. The anti-money laundering law is all about KYC. There is no debate that Aadhaar KYC is a very good option.

    As far as karvy kyc for mutual funds is concerned the new investor who has Aadhaar and a net banking-enabled bank account, the modern onboarding and primary initial investment can happen quite quickly over a website or a mobile app can fill the KYC form and get everything linked. This way the government is making efforts to boost the economy.

    Why is it required to Link Aadhar?

    It is to be noted that SEBI has made the process of investing in various mutual funds simpler and easier in the last few recent years. The actual processes have been customized and aims to be user-friendly and with various online options has been readily available to different and interested mutual fund investors. In the earlier decade, the long and tricky Paperwork has been the most difficult part of mutual fund investment decisions. But another hurdle was Paper-based Know Your Customer (KYC) as it is one of the biggest dampeners in the whole process.

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    For a developing country like India with less per capita income and moderate will to invest in the share market, the actual investment in different stock markets and mutual funds all across the country is considerably low and very minimal. The primary part of individual savings goes directly in the bank deposits. To encourage various investments in different mutual funds, the board of SEBI and the Government of India takes up various initiatives to simplify the process of investment in the share market. One revolutionary step is Aadhaar-based verification and video-based in-person verification for e-KYC, these are very simple and innovative. Recently, SEBI has promoted and proudly facilitated e-KYC. As a result, the primary mutual fund investors can get their basic KYC formalities done online within no time. In addition to this, the basic e-KYC is simply paperless, the process is innovative and more real-time. Not only this, existing and main investors in mutual funds markets who have majorly completed KYC formalities offline do not require to do the processes all over again. However, the various options for offline KYC route, can again be done.

    Importance of  e-KYC for mutual fund    

    The process of e-KYC can easily be performed by using an Aadhar card. If a financial investor has an Aadhar number, he can submit and give the same online. The system will automatically retrieve his data or financial information from a centralized database so that the investor does not require to fill up all his details once again, he could avoid this easily. The ekyc system requires a registered mobile number. He has to use this password for verification or to verify his details. These are the primary things that an investor is needed to know along with regard to linking various Investments in different Mutual Funds with Aadhar.

    Is Aadhar Mandatory For Mutual Funds?

    The answer is YES.

    Aadhar linking has been made mandatory for all investments in Mutual Funds. By linking their own Mutual Funds investment with Aadhar card number, one or the primary investor authorizes the agent for various seeding customer's Aadhar number which is solely based on PAN details for all types of various financial accounts that is primarily maintained with direct Asset Management Company (AMC) for KYC (Know Your Client) and for other factors which are due mandatory and diligence purposes. By doing this, the investor also authorizes the agent for linking and sharing and downloading the various Aadhar and major demographic information with CKYCR (Central KYC Registry) agencies and other KYC agencies related to Indian financial markets. CAMS (Computer Age Management Services) has recently launched an online facility which aims to promote and to link mutual fund investments to Aadhar. The online or offline Linking Aadhar is made mandatory for all the Individual residents of India. But the process of Aadhar linking is not at all applicable for Non-Resident Individuals (NRIs), Non-Individuals and HUF.


    AUTHOR

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Bijan BiswalSunday , May 16 , 2021

    ....

    Mr Bijan is the man behind www.paisababu.com. He is a well qualified (B.com, MCA, MBA, LLB ) and entrepreneur having more than 20 years expertise in Business. He engaged in blogging for many years. Paisababu.com blog is ranked as one of the Top Personal Finance Blog in India. He is not affiliated with any financial product, service provider, agent or broker. The purpose of this blog is to spread financial awareness and help people in achieving excellence for money.to make ware people about various financial products in India for their use. Please note that the views expressed on this Blog/Comments are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.

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