As per a report by CNBC TV18, The Association of Mutual Funds in India has raised concerns about the new Know Your Customer norms for Mutual Fund investors. In a recent communication to SEBI, AMFI has sought relaxation in these norms due to several challenges faced by investors.
Here are the key points from AMFI’s communication:
New KYC Norms: The new KYC norms were implemented from April 1, affecting investors in Mutual Funds. These norms aim to enhance transparency and security but have led to certain issues.
Investment Hurdles: A significant number of new investments are not going through smoothly under the revised KYC process. This has caused inconvenience for investors who want to participate in Mutual Funds.
SIP Bounce: Existing Systematic Investment Plans (SIPs) are facing challenges, with some getting bounced due to KYC-related issues. This disruption impacts regular investment plans and can be frustrating for investors.
Redemption Delays: In some cases, redemptions (withdrawals) are not being paid out promptly due to the stringent KYC requirements. This delay affects investors who rely on timely access to their funds.
NRI Account Opening: Non-Resident Indians (NRIs) without an Aadhar card are encountering difficulties in opening accounts with new Asset Management Companies (AMCs). The KYC process has become a hurdle for NRIs seeking to invest in Indian Mutual Funds.