How to Check KYC Status?

The Reserve Bank of India made the Know Your Customer (KYC) process mandatory in 2002 for the customers before they begin their investing journey. All the banks had to be KYC-compliant by December 31, 2005. According to the Prevention of Money Laundering Act, 2002, and the Securities Exchange Board of India-KYC Registration Agency (SEBI-KRA) Rules, 2011, it is compulsory for all market participants to follow the KYC guidelines. The main aim of KYC was curbing illegal activities such as money laundering, terror funding, bribery, and other corrupt means of accumulating money.

What does it mean to be KYC compliant?

Complying with KYC guidelines is mandatory if you want to avail financial services or invest in various financial instruments. Being KYC compliant means that the financial house has access to all your personal information and that enables them to not only verify your credentials but also monitor your transaction trail.

Importance of being KYC Compliant?

For any financial transactions, opening a new bank account or applying for a credit card, KYC details are necessary. Similarly, if you are interested in stock markets, mutual funds investments, or want a new sim card for your mobile, KYC compliance is important. Unless you are KYC compliant, you also won’t be able to make any changes in the names of your beneficiaries.

Role of KRA’S

Know Your Customer Registration Agencies (KRA’s) are registered with the SEBI and maintain a central database regarding all information of investors which can be availed by various intermediaries firms.

There are five KRAs in the country:

  • CDSL Ventures Ltd (CVL), a subsidiary of the Central Securities Depositories (India) Limited
  • NSDL Database Management Limited (NDML), a subsidiary of the National Securities Depositories (India) Ltd,
  • The National Stock Exchange’s agency - DotEx International Limited (DotEx),
  • CAMS Investor Services Private Limited
  • Karvy Data Management Services Limited (KDMS)

Once you are KYC compliant with an intermediary, your data is stored in the central database, and you can continue making financial transactions.

How to check whether you are KYC compliant or not?

Checking KYC compliance online is simple. All you need to do is go to the website of any KRA and provide your PAN details. In the case you are not found to be KYC compliant, follow the steps as below:

1. Offline Compliance : First, you need to download the KYC form and fill out the requisite details. Thereafter, provide your ID and residence proof for which you need to submit documents such as a copy of your PAN card, Aadhar card, passport, driving license, Voter ID, or bank passbook, having your photograph.

For proof of address, you can provide documents, like recent electricity bill, rent agreement, landline bill etc along with your passport size photographs. The filled-up form along with the documents should be submitted to the relevant authorities.

2. Compliance via Aadhar based biometric : If you are interested in mutual fund investment, an authorized person from the fund house will visit your house, collect your Aadhaar card, and map your biometrics such as fingerprints. Your KYC will be validated by matching the fingerprints with the Aadhaar database.

However, Aadhaar-based compliance only allows for annual transactions, which are less than Rs 50,000. To remove this ceiling on investments, you can opt for the In-Person Verification (IPV) through a video call facility to verify your identity and address proof.

3. Online Compliance : Online KYC compliance can also be done via the websites of any KYC Registration Agency (KRA). Thereafter, create your account and provide your personal details. Then you need to enter your Aadhaar number along with the registered phone number. Your information will then be verified through an OTP.

Finally, you will be required to upload a self-attested copy of your Aadhaar card. Post completion, your request will be processed.

How to check KYC status?

After the submission of the KYC form online, the status can be checked online at the KRA’s website by entering your PAN card details. All the information about the existing status of your KYC compliance application would appear. If your KYC is not verified, the status will show as pending. Otherwise, the KYC verification status will appear as ‘Verified by NDML.

Conclusion

Thus, being KYC compliant is a mandatory requirement before starting your investment journey. As an investor, you can avail multiple benefits, like convenient and digitally secure transactions. However, choosing a trusted and reliable financial partner is necessary before making investments. IIFL can be your trusted partner to provide you with the best Demat account and other financial services along with a gamut of individually tailored investment plans to help realize your investment goals.

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