Mutual fund investment: Linking PAN, Aadhaar to get KYC registered status is not a criteria

Inoperative permanent account number (PAN) due to not linking it with Aadhaar is no longer an issue for investing in mutual funds.

Markets regulator Securities and Exchange Board of India (SEBI) changed the know-your-customer (KYC) norms on May 14, 2024.

Simply put, linking PAN and Aadhaar for investors to get their KYC status to show as ‘KYC Registered’ is not required anymore.

Earlier, linking of PAN with Aadhaar was necessary in case of both 'KYC Registered' and 'KYC Validated' statuses.

Non-linking of PAN and Aadhaar led to the KYC status of the investor to be displayed as ‘On-hold KYC’.

Now, if a KYC Registration Agency (KRA) has verified the PAN, name and address, then the KYC status will be shown as ‘KYC Registered’ instead of ‘KYC On-hold’.

However, linking PAN and Aadhaar is still required to get the status to display as ‘KYC Validated’.

For investors to obtain ‘KYC-Registered’ status, they need to complete the KYC process using other officially valid documents (OVDs) such as Aadhaar, passport, driving licence, or voter ID card.

Steps to check the mutual fund KYC status:

• Log on to www.cvlkra.com
• Click on KYC inquiry to know the status of your existing mutual fund KYC

The following three results are likely to be displayed

On-hold KYC status: Such investors cannot engage in any mutual fund transactions. This includes systematic investment plans (SIPs), lump sum purchases, or redemption requests.

KYC-Validated status: No restrictions on transactions for such investors who can deal with all asset management companies (AMCs) or fund houses.

KYC Registered status: These investors can only transact with AMCs or fund houses where they already have investments.

In case the status is ‘KYC On-hold’, then the reason could be non-validation of mobile or email ID, PAN not linked with Aadhaar, or deficiency in KYC documents. So, uploading valid documents on the mutual fund website is required.