To get away with the hassle of repeatedly complying with KYC requirements for customers of mutual funds, central know Your Customer (CKYC) is in place. The process requires updation of KYC details of investors by mutual fund players in order to centralize it.
What CKYC means for an investor?
Now for multiple investments i.e. investments into different mutual funds shall not require repetition of the KYC process i.e. a central KYC will rule out KYC completion time and again. In case of bank account opening as well as while making stock purchase and sell, customers, as otherwise need to complete the KYC process only once. So, a central KYC in mutual fund was hence essential.
Where the CKYC is being done?
Different stakeholders in the mutual fund industry including investors, fund houses, transfer agents as well as registrars have been directed to upload correct details of investors KYC on the Central Registry platform in a phased manner.
For the same, government has authorized Central Registry of Securitisation and Asset Reconstruction and Security Interest of India (CERSAI)
So, as and when different fund houses as well as financial institutions gain access to correct KYC details of an investor on a unified platform, he or she is not required to complete the KYC process with them.
KIN or 14-digit KYC Identification Number
On successful completion of CKYC registry with the agency, a 14-digit number called the KYC Id number is provided which can be quoted to transact in financial instruments and hence reflect that one is reasonably KYC compliant. Note, new investors in mutual funds need to get the CKYC completed.