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The Securities and Exchange Board of India (SEBI) is planning to relax the Know Your Customer (KYC) norms on email IDs and mobile numbers for mutual fund investments.
Currently, both email IDs and mobile numbers are mandatory for mutual fund KYC purposes. However, SEBI is considering making either of these two (email ID or mobile number) optional to make it easier for new investors to enter the mutual fund industry.
There are several reasons why SEBI is considering relaxing the KYC norms like ease of access to mutual funds, reduce the burden on mutual fund intermediaries, who currently have to collect and maintain KYC records for all investors.
However, there are also some concerns about relaxing the KYC norms. For example, it could make it easier for fraudsters to open accounts and invest in mutual funds using stolen identities. Additionally, it could make it more difficult for mutual fund intermediaries to track down investors and communicate with them.
[Read: Have Your KYC Details Changed? The KYC Modification Process Will be Online Soon]
SEBI may carefully weigh the pros and cons of relaxing the KYC norms before making a final decision. The proposal is still under consideration, and SEBI is likely to issue a consultation document on the matter soon.
SEBI shall strike a balance between promoting financial inclusion and ensuring investor protection. A well-structured approach that addresses potential risks while facilitating accessibility could prove beneficial for the mutual fund industry and the broader financial landscape in India.