‘After three decades in market…’: Kotak AMC’s Nilesh Shah reacts to repeated KYC demands
Nilesh Shah, the managing director of Kotak AMC, on March 29 took to X platform (formerly Twitter) to express his annoyance with the current know your customer (KYC) process.
“After three decades in market and filling every form for KYC over the years including bio metric verification (for now abandoned MPIN) my heart pains to receive such e mail,” Shah said sharing a screenshot of the mail received by him as part of KYC norms for the Securities Market.
“How many times KYC needs to be done? Clearly our KRA agencies / Registrar can do a better job,” he added.
Shah, however, appreciated the efforts undertaken by mutual fund distributors and intermediaries and asked Securities and Exchange Board of India (Sebi) to direct agencies to do a better job.
“Kudos to all mutual fund distributors and intermediaries who tirelessly keep on updating KYC requirements for their clients. Sebi should direct KRA agencies and the RTAs to do a better job,” he said.
Others frustrated by repeated demands for KYC also reacted to Shah’s post.
Investor Rajeev Mantri said on X, “There is a Kafkaesque level of compliance and paperwork in anything to do with financial services sector. How will savings be converted into investment, if intermediaries and participants alike are strangled with red tape? Will India become a $10T economy just like that?”
Another X user Darshit Patel wrote, “You are Honcho of MF industry and still facing such issue. Imagine the pain & waste of time of Investors and Mutual Fund Distributors. Can’t we adopt Universal KYC concept.”
Ajay Pandey, CEO and co-founder of CARD91 wondered if there is a need for a separate body like NPCI to smoothen KYC. “#KYC is one process, if overhauled can make financial services distribution speedy and cost effective. You ask any regulated entity, the biggest nightmare for them is KYC, also cost is prohibitive in certain cases. Do we need a separate body like NPCI to smoothen out KYC?”
In a separate post, Shah said, “Kudos to all Mutual Fund Distributors and Intermediaries who tirelessly keep on updating KYC requirements for their clients. SEBI should direct KRA agencies and the RTAs to do a better job.”
KYC is an important process implemented by financial institutions to verify and identify customers. All the mutual funds investors without any “officially valid documents” are required to re-do their KYC again before March 31, failing to do so will stop them from mutual fund transactions such as systematic investment plan (SIPs).
The officially valid documents include Aadhaar card, passport, voter ID card, among others as KYC based on proofs such as bank statements and utility bills will no longer be valid after March 31.
According to the Sebi, the valid documents are Aadhaar card, voter ID card, passport, among others. Proofs based on KYC such as bank statements and utility bills won’t be valid after March 31.
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