MFs roll out e-KYC for first-time investors

To make it easier for investors to buy or sell mutual fund products, fund houses are offering an electronic, or e-KYC, initiative to first-time investors.

This new service will help investors buy or sell mutual fund (MF) products in a simpler and faster way.

Quantum MF and Reliance MF are already off the block, which offer e-KYC (Know Your Customer) that allows first-time investors to fill a simple form and complete the formalities in a paperless manner. Others are likely to follow suit.

After completing the KYC formalities, fund houses schedule a video conference with the investor over Internet to do an in-person verification (IPV). Once the IPV is done, fund houses send a confirmation.

"e-KYC will make investment simpler and faster. The new measure will attract retail investors in a big way," Quantum MF Chief Executive Jimmy Patel said.

Currently, lengthy paperwork for the KYC process demands several documents to be submitted as proof, which takes a lot of time.

Furthermore, fund houses are in discussions with markets regulator Sebi to allow investors to invest in mutual fund products by using the Aadhaar number.

Besides, they met with Infosys co-founder and former UIDAI chief Nandan Nilekani last week in this regard.

Not just that, fund houses are taking several steps to raise their share through this route. They have been tapping social media platforms like WhatsApp and Facebook and a host of other calling and messaging apps to facilitate transactions in MF products.