Know Your Customer (KYC) is a requirement by the government to ensure that only people whose identity is established invest in mutual funds. This is to prevent money laundering by anti social elements.
The KYC check is done by the mutual fund or the Registrar Agency or an advisor before any investment is taken in. In case the KYC turns out to be ‘not available’ then the investor has to get a KYC done.
In the Jama app which is one way to get started with investing quickly, the investor is prompted to get an instant eKYC done. They do this by verifying an OTP sent to their mobile number (assuming it is linked to Aadhar). This allows an investor to quickly start investing.
An eKYC allows an investor to invest upto Rs 50,000 in any fund house per year. To relax this limit, one can get a full KYC done which takes about ten days.
