What is KYC?
KYC, or Know Your Customer, is a method for businesses, particularly banks, to get to know their consumers. Banks will have access to your Aadhaar data, as well as your fingerprint and digital signature, through the KYC process. This is all done with your permission and is necessary for enhanced security.
The primary goal of KYC is to avoid internet fraud, money laundering, and identity theft. Banks now have more access to your details, personal information, and financial records, allowing them to monitor all types of activities in your account. According to the RBI rules, all of these characteristics are within the bank’s regulatory and legal framework.
When is KYC Required?
- Setting up a new bank account.
- When you apply for a loan, a credit card, or a debit card.
- If you are considering investing in a mutual fund.
- Opening a bank locker.
- If there are any modifications to be made in terms of beneficiaries or signatures.
Another situation in which your KYC is required is when your prior papers stored by the bank are insufficient. Banks will send a representative to collect the essential information for extra evidence and security via KYC.
PAN KYC Status
In a technologically driven society, most people and businesses are moving their operations online in order to serve consumers all over the world and secure their presence in the digital realm. However, in today’s fast-paced world of technology, there are a few drawbacks, such as security. The internet may be a dangerous place for websites since it is prone to hacking and fraud. Many websites have implemented KYC, or Know Your Customer, as an additional security precaution to their systems in order to avoid fraud and compromise security. Among all of these websites, banks and other financial institutions have fully adopted KYC.
Banks and their websites have frequently been the victims of hackers and financial fraud, despite the fact that the bank’s website and net banking transactions are protected by several security layers. These hacking and financial fraud instances affect both the customers and the bank.
KYC with PAN Card
A PAN card is one of the papers that must be provided as part of the KYC process. You must present your PAN card as proof of income and identification to validate your identity and that you are a tax-paying citizen of the nation.
The Income Tax Department of India issues you a PAN card, which allows you to file your taxes and tax returns to establish that you are above the tax band and a regular tax-paying citizen of the nation. A PAN card is required for the majority of your financial operations, such as establishing a bank account, investing in mutual funds, and so on.
However, during the 2017 Union Budget, the government emphasized Aadhaar card and PAN card interchangeability, which means that even if you do not have a PAN card, you may still carry out numerous financial transactions using your Aadhaar card.
How to Check PAN KYC Online
After you’ve submitted all of your papers and the KYC form online, follow these steps to verify the progress of your KYC.
- Visit the Central Depository Service Limited’s website at https://www.cvlkra.com/kycpaninquiry.aspx.
- You can use your date of birth or PAN card to verify the status of your KYC.
- Enter your PAN card information and press the submit button.
- If the KYC has been validated, the status will be MF-Verified by CVLMF.
- However, if the KYC is validated, the status will be ‘Pending.’
KYC Necessity for Mutual Fund Investments
KYC’s major goal is to ensure that deposits/investments are made in the name of a real person. It also aids in the reduction of black money. As a result, all mutual fund investors must follow the KYC procedure through a KYC Registration Agency (KRA). KRA, a SEBI-registered company, stores investor data in a single database to which all fund companies and intermediaries have access.
Most investors are familiar with the agencies CAMS, NSE, and KDMS. SEBI later introduced a standardized Know Your Client approach to ensure consistency and uniformity across SEBI-registered intermediaries. Portfolio managers, mutual fund firms, venture capital funds, and stockbrokers, among others, found it simple to prevent the duplication of KYC papers. Investors will find it simpler to comply as a result of this.
How to Check if you are Pan card KYC Compliant
Mutual funds are one of the few strategies to accelerate the growth of your money. KYC is the first step in investing in mutual funds since it is a well-controlled investment plan. However, you may already be KYC-compliant. Checking your KYC status online is very simple. You may verify if you are KYC compliant by going to the official website and entering your PAN.
Documents Required for KYC
Along with their Know Your Client application form and a passport-sized photograph, investors must submit the following papers.
ID Proof: PAN Card, Driver’s License, Passport photocopy, Voter ID, Aadhaar Card, or bank passbook.
Proof of Address: Recent landline or mobile bill, recent energy bill, passport copy, recent Demat account statement, latest bank passbook, ration card, Voter ID, rental agreement, Driving License, or Aadhaar card.
Available KYC Procedures
CDSL Ventures Limited has been recognized and authorized by the mutual fund industry to carry out the Know Your Customer procedure. You can finish the procedure either offline or online.
Fill out the KYC application form available on the CDSL Ventures website.
Sign and provide a physical copy of the form to the authorities or intermediaries with whom you intend to invest in mutual funds.
Attach certified photocopies of ID and residency evidence, as well as a passport-size photo, to the form.
If you have an Aadhaar card, you can choose Aadhaar-based KYC. You may request that an official from the fund house or agency come to your location to collect the information. Send a copy of your Aadhaar card to the fund house, broker, or distributor, and they will map your fingerprints on their scanner and link them to the Aadhaar database. Your information will be shown in the database if the fingerprint matches that in the database. This indicates that before proceeding with your mutual fund investment, they confirmed your KYC.
KYC Using PAN Card – FAQs
Q1. What does the term “Customer” signify in the context of KYC?
A client is defined under KYC standards as an entity or individual who has an account or a commercial connection with a bank.
Q2. Will the KYC form have to be filed again if some information, such as an address change?
Yes, if the customer’s address or other key facts about their identification change, the KYC form must be filled out and filed anew.
Q3. Where can I get the KYC form?
Individuals can obtain the KYC form from their broker or financial advisor. They may also obtain it from the website of a mutual fund firm.
Q4. How to update the KYC online?
You may choose to update your name or permanent address in your digital KYC data. You would need to go to the KRA’s eKYC site and log in using your credentials. Then you click the ‘‘Update KYC” option. You then enter your updated information and upload scanned copies of the necessary papers. You must finish the verification process by entering the OTP sent to your registered cellphone number. Then you click submit to finish the online KYC update.
Q5. How can I check the status of my KYC DIN?
You can go to the MCA Portal. Then you click on verify the Director’s DIN PAN information and input the DIN. Then you hit the submit button to verify the KYC DIN status.