KYC Norms

By Research Desk Nov 17, 2008
I have made investments in different mutual funds, not investing more than Rs. 50,000/- in any one of them. My doubt is whether I can invest more than Rs. 50,000/- in a particular fund if the amount of each investment is less than Rs. 50,000/- as per the KYC (know your customer) requirements. Many investment consultants have told me that if each investment in the same fund is less than Rs 50,000/- at a time KYC compliance is NOT required. Is it so? Suppose I set up an SIP of Rs. 5,000/- for, say, 24 months, the total investment in that particular fund will be more than 50,000/-. Can I do that without KYC compliance? -Asim Kumar
Yes, you can make the investment more than Rs 50,000 in a particular mutual fund scheme. According to market regulator SEBI guidelines, all investors who want to make an investment of Rs 50,000 or more in a mutual fund scheme will be required to complete the Know Your Customer (KYC) process. This would also apply to SIP investment, but only if each SIP installment amount is greater than or equal to Rs 50,000. It is the amount invested at a single time that is taken up for consideration rather than the total amount invested over a period.
In above quoted example, you can do that without KYC compliance since the SIP amount is less than Rs 50,000.