SEBI makes KYC mandatory for maintaining e-wallets in mutual funds from May 1

Abhishek Saseendran, CEO, CoinDesk, said, “Making e-wallets used in mutual funds KYC compliant is a welcome step. This will not only help investment firms mitigate money laundering risks but also further digitization in finance.” Investors can look forward to a completely digital process for mutual fund investments, which will surely bring in new investors driven by convenience. For firms and registered intermediaries, digital KYC will help reduce investor onboarding expenses and is an important tool to ensure compliance with RBI regulations. KYC systems also play an important role in efficiently managing and analyzing customer data to reduce ID fraud. Overall, KYC compliance for e-wallets Starting mutual funds will become more attractive, secure and easy to access for future investors.If there is one thing investment firms need to be aware of, it is that KYC data is extremely sensitive and handling such data is very difficult. And there should be correct access control while processing. Firms need to partner with KYC providers who demonstrate a genuine commitment to data security.”

Banksathi founder Jitendra Dhaka said, “Know your customer (KYC) requirements will ensure that only authorized users have access to e-wallets, thereby boosting security and reducing the risk of frauds. By integrating into KYC, there will be improved investment transparency for customers, as they will be able to trace their mutual fund holdings and transactions more easily. Once the KYC process is complete, customers will be able to access e- Will be able to invest in mutual funds using the wallet.

“It is possible that a large number of people living in Tier 3 and Tier 4 and 5 cities are unfamiliar with the KYC process and struggle to understand the norms and procedures involved. And they may not have enough literacy in digital media, which makes it difficult to do KYC through online platforms. Customers who live in more remote areas and do not have access to the Internet or cellphones may have a more difficult time completing the Know Your Customer process online. Consequently, it is the responsibility of SEBI and companies supplying e-wallets to inform users about the benefits of KYC and simplify the process of completing KYC for customers in Tier 2 and Tier 3 locations. E-wallet service providers should also study other methods of completing KYC for users, such as setting up kiosks or forming partnerships with local agents who can assist customers through the process,” Jitendra Dhaka said. Commenting against the challenges for Tier 3 customers further added 4 of 5 cities.

Sonam Chandwani, Managing Partner KS Legal & Associates said, “Securities and Exchange Board of India (SEBI) had recently announced that with effect from 1st May 2023, carrying out KYC process for maintaining e-wallets in mutual funds shall be mandatory. This is in regulation. In line with SEBI’s efforts to enhance the safety and security of investments made by investors. KYC refers to the process of verifying the identity of an investor as per the guidelines laid down by SEBI. are required to comply with this rule and complete the KYC process by May 1, 2023. Failure to do so may result in suspension or closure of their e-wallet accounts. E-wallets a popular way to invest in mutual funds E-wallets have become popular as they provide a convenient and secure way to manage investments. However, with the increasing popularity of e-wallets, there has been an increase in the number of fraudulent activities related to them. It is important to reduce this risk and protect the interests of investors. In order to protect the public, SEBI has made it mandatory for investors to maintain e-wallets in mutual funds to complete the KYC process.”