NRI and OCI KYC Validation Rules

Starting April 1st, 2024, the past two months have been a rollercoaster for us at iNRI. When SEBI introduced Aadhaar as an OVD to validate KYC, it led to the freezing of investor accounts and the rejection of new mutual fund purchases.

➡️ OVD - Officially Valid Document

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The Good News 🤩 - KYC Rules Relaxed

On May 14 2024, SEBI made some relaxations for Non-Aadhaar KYCs for NRIs and OCIs until April 30, 2025. Isn’t that a breather?

So, for another year, you can continue to invest without worrying about KYC validation.  

“For Non-Resident Individuals (NRIs) /Foreign Nationals - Provision of KYC records portability has been relaxed till 30th April 2025, i.e. NRIs can open a new account with any of the SRIs if the KYC status is ‘KYC-Registered’.” - SEBI

However, if you have Aadhaar, we highly recommend completing your KYC Validation at the earliest to become compliant sooner.

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Do you have to stop investing? No, while you continue to invest, we’ll take care of your KYC processing.

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Wondering about the KYC issue? Here’s a detailed explanation. 

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The New KYC Norms - Background

Folios of several mutual fund investors were frozen between April 1st, 2024, and May 14th, 2024, citing non-compliance with Know Your Customer (KYC) norms.

Reference Link🔗

SEBI asked KRAs to verify mutual fund investors' KYC based on PAN, name, address, mobile number, and email IDs. 

The exercise was intended to match and validate investors' records with official databases such as the Income Tax (IT) database based on PAN and Aadhaar.

➡️ SEBI → Securities and Exchange Board of India

➡️ KRA → KYC Registration Agency

Investors' KYCs completed using documents other than PAN or Aadhaar could not be validated, so they are asked to redo their KYCs.

Suggested Read - How to Link Pan and Aadhaar

What Is KYC Status?

KYC (Know Your Customer) verification now has three statuses

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The KYC Validation Rule

The new KYC validation rule in India, effective April 2024, has changed the KYC norms for mutual fund investments. It focuses on verifying investors' identity and address details. 

The Rule Says: KYC must be validated to invest in mutual funds. 

As mentioned earlier, the new KYC relaxation allows you to invest in mutual funds with a KYC Registered status as well. 

💡Check your KYC status through any of the KRA websites -

➡️ CVL: https://www.cvlkra.com/ (under the KYC Inquiry tab)

➡️ NDML: https://kra.ndml.in/kra-web/jsps/pos/KYCClientInquiry_NEW.jsp 

➡️ NSE: https://www.nsekra.com/ 

➡️ CAMS: www.camskra.com

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The New KYC Rules - What Should You Do?

Don’t wait, start investing.

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Complete your KYC validation to stay compliant with your mutual fund investments before April 30, 2025.

* Upload your Aadhaar and initiate your KYC and we’ll take care of your KYC re-processing.

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NRI KYC Validation: Frequently Asked Questions (FAQs)

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What problems are mutual fund investors facing in the renewed KYC process?

Redoing the KYC process may seem straightforward. However, even after submitting the necessary documents there have been delays in updating investor information at the KRAs' end. Without a validated KYC, the AMCs were rejecting applications for new investments. 

Thanks to the new relaxation - introduced on May 14th, investors can now invest with KYC registered status. However, please note the relaxation is only until April 30, 2025.

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How can I check my Mutual Fund KYC status?

Simply visit any of the KRA websites -

➡️ CVL: https://www.cvlkra.com/ (under the KYC Inquiry tab)

➡️ NDML: https://kra.ndml.in/kra-web/jsps/pos/KYCClientInquiry_NEW.jsp 

➡️ NSE: https://www.nsekra.com/ 

➡️ CAMS: www.camskra.com 

 You'll see one of the following outcomes:

👉KYC Validated: With this status, you're all set to proceed. 

👉KYC Registered: This indicates that the provided KYC documents cannot be directly verified based on the submitted information. However, validations such as email and mobile numbers are confirmed, allowing you to continue investing in MFs 

👉KYC On Hold: These cases involve issues like incomplete PAN-Aadhaar seeding, failed email and mobile validation, or KYC conducted without an officially valid document such as a bank statement or utility bill. 

In such instances, you need to complete PAN-Aadhaar linking in your Income Tax records to activate the PAN and redo KYC. Once done, update email and mobile numbers with the fund house and request a modification to update the status.

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I don’t have Aadhaar, what should I do?

With the new relaxation NRIs and OCIs without Aadhaar, can get their KYC Registered, and can start investing in mutual funds. 

However, this is a temporary relaxation valid until April 30, 2025. 

You can use passports, PIO, or OCI cards as an OVDs, with proof of overseas address mandatory. Foreign government documents or embassy letters serve as address proof if OVD lacks address details, and foreign language documents must be translated to English.

👉Typically, only email validation is required for NRIs. 

👉If an Indian number is provided but not in use, you need to update KYC. 

👉Foreign numbers are exempt from mobile validation but must ensure NRI status on their PAN. Investing without a phone number is possible if PAN is marked NRI.

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Got more questions?

Don’t worry, we are here to help.

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