How CKYC Can Help You Serve Investors Better
Feb 07, 2017

Author: PersonalFN Content & Research Team

In India the reach and popularity of financial products such as mutual funds and insurance is abysmal considering the large population base we have. Mutual fund schemes, though being present for decades now, have not won as many hearts as they could from the benefits of investing in them.

Apart from the obvious reasons for this such as lack of awareness, rampant mis-selling, investors feel burdened to comply with multiple KYC (Know Your Client) forms that have added to the rather complex and cumbersome paperwork required to invest in financial instruments.

Now, hopefully things will change…

The Central Know Your Customer (CKYC) form that was introduced since February 1, 2017 will make investing easier and reduce roadblocks in the financial services space.

Investors/clients will have to undergo the process of complying with CKYC just once – either with a bank, mutual fund or an insurance company. They won't have to fill-up the KYC form all over again with other financial product manufacturers again. The hassle is reduced!

Secondly, this procedure is a mechanism to deter money laundering.

The job of the authorities will be reduced to retrieving the investment data against the single photo identity proof and an address proof. To know how many financial investments you hold in your name, authorities will have to take lesser efforts.

A brief on CKYC...

To store the KYC records of the customers, the Government has appointed Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) to establish a central KYC registry.

And how does it benefit a client?

  • CKYC will store all information about investors at one central server that is accessible to all the financial institutions.
  • After opening a KYC account, investors will receive a 14-digit identification number. When an investor wishes to buy a financial instrument, all he/she has to do is furnish this number.
  • What the number will do is point to the record file that will have all the investor's details saved centrally.
  • Lastly, the FATCA declaration will also available in the same KYC form.

How does it benefit you?
  • CKYC makes client on-boarding easy. This saves you, the financial advisor, and the financial product manufacturer from completing the tedious process of KYC many times over.
  • You won't have to spend your time filling up multiple KYC forms and provide countless self-attested documents.
  • Convincing a client to invest in a mutual fund scheme or a fixed deposit becomes simpler because of the reduction of barrier. It will save time and help you focus on drawing financial plans, addressing their queries and educating them about various avenues of investing in financial services.

Timeline to comply with CKYC

As per the Prevention of Money-laundering (Maintenance of Records) Amendment Rules, 2015, you need to file the electronic copy of the client's KYC records with the central KYC registry within 3 days of commencement of an account-based relationship. You can download a CKYC form here.

Are there any challenges?
  • The new requirement may hit SEBI's e-KYC programme that uses Aadhaar and One-Time Password (OTP) through mobile phones for authentication of individual investors. The regulator's plans to start selling mutual funds through e-commerce portals may also get delayed. And if there are technical glitches, there may be a problem while serving clients.
  • Moreover, information such as mother's name, proof of permanent address, maiden name, etc. are some of the fields that are now needed to be recorded. Investors need to go through the whole KYC process again if they haven't provided it earlier.


The CKYC is a healthy step towards removing entry barriers. It will encourage investors to invest in capital market. It is a win-win for both – financial advisors and investors. Educate investors on the importance of investing in mutual funds as they endeavour to meet numerous financial goals in life. Also highlight why having an optimum life insurance and health insurance cover is imperative. Conducting a Financial Health Check Up, reviewing investment portfolios would also ensure investors' long-term financial wellbeing.

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