Step-by-step Guide to Complete eKYC (Know Your Customer)

Over the last few months, the Indian government is encouraging citizens to invest in Mutual Funds.

The state is spending millions of Rupees on radio, TV and print advertisement to encourage the proverbial “common man” including those with limited income to benefit from what can be high returns that Mutual Funds generally are known to offer, if stock market, economic situation and political scenarios remain stable.

ekyc aadharAccording to these commercials, anyone can invest as low as Rs.500 in Mutual Funds. Additionally, the advertisements also claim, investors can withdraw their money anytime to meet emergencies or other sudden requirements for cash.

Indeed, some new policies governing Mutual Funds or MFs are encouraging more people to look at these investment options.

Investing in Mutual Funds

There are two methods in which Indians can invest in MFs. One is by visiting your nearest bank, selecting one or more MFs and issuing standing instructions to your bankers to debit a fixed monthly amount to top up the portfolio.

The other is online. Here, you can visit the websites of banks, Non Banking Financial Companies (NBFCs), stockbrokers and other organizations that offer the facility to invest in Mutual Funds.

To do so, you need to submit an online form along with details of your Aadhar card, Permanent Account Number (PAN) card, valid email ID and mobile number, among others.

Regardless of the manner in which you wish to subscribe to new or existing MFs, current rules governing financial transactions make it mandatory for you to comply with the Know Your Customer (eKYC) formalities of banks, NBFCs and other related institutions.

Types of KYC

Investors looking at Mutual Funds have the option of completing KYC formalities in two different methods.

  • Manual KYC: By visiting a bank, NBFC, stockbroker or other authorized agency. Here you will submit a completed form along with copies of your Aadhar card, PAN card and mention your telephone number and valid email, along with other details such as the address for correspondence.
  • Electronic KYC: Investing online is much simpler and can be done round the clock. To do so, you need to have Electronic KYC or eKYC. Once you complete eKYC, investing becomes very easy not only for Mutual Funds but also for Systematic Investment Plans and other attractive schemes.

Hence, it is ideal to have your eKYC completed at the earliest to invest online and make the best from MFs, SIPs and other schemes.

How to Do eKYC Online

There are some organizations that are authorized by the Indian government to assist you in completing eKYC formalities.

Search online for eKYC providers in your area. Karvy and CAMS are among two organizations empowered by the Indian government for providing eKYC services.

You can do so directly on their websites or through that of a bank, NBFC or financial institution where you buy Mutual Funds.

EKYC Documents

Since eKYC is done online, you do not need to submit any documents or upload their scanned copies. You need to provide details on online forms only. These include details of your

  • Aadhar Card
  • PAN Card
  • Email ID registered on your Aadhar Card
  • Mobile number registered on your Aadhar Card
  • Bank Details from where you will invest

EKYC Step by Step

Once you have these documents in place, visit Karvy, CAMS or any Mutual Funds provider website. If your bank offers the facility of investing in MFs, you can log in to your net banking account and opt for investing in Mutual Funds.

  • Fill your name, PAN Card and Aadhar Card number.
  • Submit your mobile phone number given at the time of registering for Aadhar.
  • Add your email ID submitted at the time of registering for Aadhar.
  • Provide alternative contact address and other details, where necessary.
  • If you wish to nominate a successor, put their name and address, date of birth.
  • In case a nominee is minor, submit details of an adult who will be responsible for the child till it attains the legal ‘major’ status.
  • Submit the form
  • You will receive a One Time Password (OTP) by Short Messaging System (SMS) on your mobile.
  • Another OTP will be sent to your email ID.
  • Key in both these OTPs in the blanks provided on the online form and submit.
  • Generally, eKYC is done almost immediately. In some cases it may take about 48 hours for your application to be completed.
  • Regardless whether done instantly or later, you will receive an email and SMS confirming your successful eKYC application.

Failed eKYC

  • Remember, eKYC is linked to your Aadhar card and PAN card. Hence, the mobile number and email ID you provide has to be registered with Aadhar issuer- Unique Identity Development Authority of India’s database.
  • If your email ID, mobile number or both are different than the ones submitted at the time of enrolling for your Aadhar card, your eKYC application online will be rejected. However, this is nothing to worry about.

What to Do?

  • If your eKYC application fails because the email and the mobile number provided during Aadhar card enrollment do not match, you have only one option.
  • Visit the nearest Aadhar enrollment centre and fill out the form for updating your contact details.
  • Specifically, mention on the Aadhar update form that you wish to amend your mobile number and email ID.
  • Submit your biometrics to the UIDAI staff at the enrollment center to verify your credentials.
  • Pay a fee of Rs.25 for the update.
  • Get the receipt for update of details on Aadhar Card from the enrollment center.

NOTE: Remember, the registration number, date and exact time mentioned on this receipt are extremely important. They allow you to check the status of your service request online.

  • Generally, updating your mobile number and email ID on Aadhar database occurs within a fortnight since application.
  • Once updated, you can resume the eKYC process to apply for Mutual Funds and other investment schemes online.

Benefits of eKYC

There are several benefits of having an eKYC. Other than applying for Mutual Funds, it can also be utilized for:

  • Banking Transaction
  • Buying Government Bonds
  • Investing in Postal Savings Schemes
  • Applying for Cooking Gas Connections
  • Registering on apps such as Paytm for payments about Rs. 19,000

In Conclusion

The Supreme Court of India has issued March 31, 2018, as the deadline for Indian citizens to register their Aadhar card numbers with bank accounts.

Here, eKYC is very helpful since banks can immediately verify your Aadhar Card and PAN Card Details.

Under rules stipulated by Reserve Bank of India, citizens can open a bank account anywhere in the country. Hence, with eKYC, you can open a bank account outside the place mentioned on your Aadhar card.

You can merely mention your present address and self-attest the bank form.

It is advisable to have your eKYC completed at the earliest. This is because India is tightening its financial and banking laws to plug loopholes that have led to corporate frauds, tax evasion and money laundering.

Having an eKYC ensures that your bank accounts and other investments remain secure since they are made in compliance with the existing rules, regulations and laws.

Also, you remain protected against any frauds that may arise due to the hacking of computer systems at banks or financial institutions.

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