KYC or Know your Client was an outcome of the provisions of the Prevention of Money Laundering Act 2002 (PMLA). This act made it mandatory for all market participants to comply with the Know Your Client (KYC) norms. The idea is to know who is behind the investment and also leave an audit trail. The starting point for KYC is your registered PAN card and you cannot do KYC without having a PAN card. KYC can be completed with any SEBI registered intermediary (broker, DP or mutual fund). Mutual fund applications, renewals and SIPs are invalid if KYC is not done.

There are two options for investors to do mutual fund KYC. There is the routine physical KYC, which has been in existence for a long time. In this case, all the documents must be presented at the intermediary office in person for verification. The second method is e-KYC or electronic KYC, where the entire KYC process is based on your Aadhar based authentication. The e-KYC process is very simple, quick and is entirely online.

It must be remembered that pure e-KYC only permits you to do limited transactions. Thus, with e-KYC process completed, you can invest up to Rs.50,000 in mutual funds. However, if you want to invest beyond that then you need to do physical KYC or top up your e-KYC with in-person verification (IPV). Under the new rules, for redemption, e-KYC has to be completed irrespective of the size of the redemption.


The following categories of investors have to mandatorily get their KYC done before making a mutual fund investment application.

  • Any existing investor in mutual funds or a person who proposes to invest in mutual funds needs to get their KYC process completed.
  • In case of joint applications in mutual funds, each of the applicant needs to ensure that he or she is KYC compliant.
  • In case the investment is on behalf of the minor, then the designated guardian of the minor must be mandatorily KYC compliant.
  • In case of investments done through a Power of Attorney (POA), the holder of the Power of Attorney also needs to be KYC compliant, apart from the principal investor.
  • At times, persons become an investor in units of a mutual fund by operation of law i.e. inheritance of units, transmission of units or transfer via gift. In such cases, the beneficiary will have to become KYC compliant to remain a legitimate investor.


This is the simplest, quickest and the most efficient method of completing mutual fund KYC, which is entirely electronic. The following is the modus operandi for doing your e-KYC…

  • The first step is to provide your PAN details. The system will automatically check if the PAN details are correct and if the KYC has already been done earlier. If the KYC is done and valid, you do not need to do KYC and are eligible to invest in mutual funds right away. Also note down the status, validity, time frame etc of the KYC approval.
  • The second step is the most important step, which is the Aadhar Authentication. Here the investors is required to provide the details of Aadhar card like the Aadhar number, email id, mobile etc. Ensure that your Aadhar has a registered mobile number attached and it is the same as the one used in PAN and for the mutual fund investments. Once you submit your Aadhar details, the UIDAI (the body that issues Aadhar) will send you a one-time password (OTP) to your mobile. You will have to submit this OTP number on the e-KYC screen to authenticate your Aadhar number. It can also be done via mobile.
  • The e-KYC system will also ask you for some additional information and once you submit the data it will be sent to the CVL database for cross verification. Based on this data, the KYC Identification Number (KIN) will be generated. Based on this KIN, you can start investing in mutual funds. Remember, this KIN generated based on OTP authentication is good enough to invest up to Rs.50,000 in mutual funds. If you want to invest more than that then you need to visit the office of CAMS or KFINTECH or any of the authorized verification centres to complete the in-person verification (IPV). This allows you to undertake unlimited investments without any upper limit.


If you are not comfortable with the e-KYC process, you can also opt for the physical KYC process. Here are the major steps to become KYC compliant via physical registration…

  • The first step is to download the KYC application which is available on the website of This form is also available on the website of all the mutual fund AMCs as also of the registrars like CAMS, Karvy, Sundaram and Templeton. This is free download. This form must be filled up in blue ink, without cancellations, and all details verified.
  • The second step is to provide the Proof of Identity. Remember, the proof of identity has to be provided in addition to the PAN card which is a basic requirement anyway. You can any of the following documents as proof of identity including passport, election identity card, pension card or driving license as proof of identity. Additionally, some other documents are also being accepted as proof of identity with proper attestation of a gazetted officer.
  • The third step is to provide Proof of residence. This has to be distinct from the proof of identity. Apart from the normal government documents like passport, Aadhar or driving license, you can also provide your sale deed, lease agreement, bank statement or telephone bill or electricity bill as an address proof. All address proofs must be self-attested and cannot be more than 3 months old as on the submission date.
  • An important step in the KYC process is the In-Person verification (IPV) which can be completed by visiting any of the SEBI registered intermediaries, NISM/AMFI certified distributors who are KYD compliant and certain scheduled commercial banks. You have a wide choice of options to get your in-person verification done.
  • The last and final step in the process of physical KYC submission is to submit your KYC form with the requisite documents at the nearest Investor Service Centre. Upon receipt, the KYC acknowledgement is issued and the database of CVL is accordingly updated. The process takes about 2-3 days, unlike e-KYC where the details are updated on daily basis.

KYC is an important part of the investing process. In case you are not KYC compliant, your application is likely to be rejected or even your existing units can be frozen. It behoves upon the investor to complete the KYC process at the earliest. This is your building block for investing in mutual funds.

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