The SEBI Guidelines for KYC Registration Agencies in India have been designed to simplify the process of compliance with the mandate of Section 15AA of the Securities and Exchange Board of India Act 1992. The Guidelines have also been formulated by considering best international practices to ensure compliance, as well as adherence to good governance. This also helps ensure that a comprehensive and transparent framework for proper functioning is formulated for the sector.
KYC Registration Agency (KRA)
- A KYC Registration Agency (KRA) is a registered agency with SEBI which will collect Know Your Customer (KYC) details of an investor and maintain them in the Central Registry of Securities.
- KRA will collect KYC details of an investor and maintain them in a Central Registry of Securities maintained by KRA.
- KRAs will facilitate the collection of KYC details in a centralized manner, thereby enabling investors to complete the KYC formalities once with anyone KRA.
- In case you are already register with any mutual fund or portfolio management service, you can become KYC compliant by submitting your Permanent Account Number (PAN) to anyone KRA. This is call an “offline” process. You will have to submit your PAN along with self-attested proof of address and photograph to the concerned KRA. The KRA will validate your identity using the PAN database maintained by Income Tax Department through the Centralised Processing Cell (CPC).
- If you are not register with any mutual fund or portfolio manager, you can complete the KYC process online through any of the KRAs registered with SEBI.
Role of KRA in KYC
KYC (Know Your Customer) is a process where a company verifies the identity of its clients and assesses their suitability. It is an essential practice for banks and financial institutions, which required to know the identity of their clients, understand the nature of their business, and take measures so that the client does not use their services for illegal purposes. The KYC Guidelines require banks to conduct a due diligence process. This may involve obtaining relevant information about the customer, verification of such information, and assessment of the inherent risk profile of the customer.
How many KYC registration agencies are there?
The following companies are the registered KRAs with SEBI.
- CSDL Ventures Limited
- DotEx International Limited
- Karvy Data Management Services Limited
- NDML (NSDL Database Management Limited)
- CAMS Investor Services Private Limited
Guidelines for KYC Registration Agencies
- For smooth information sharing among the registered KRAs, there should be a well-woven network among them.
- The agency will issue a letter of confirmation to the customer and the status of KYC verification after receiving the documents from the intermediary.
- The KYC Registration Agencies’ system should have built-in checks to ensure that any intermediary may only access the information of an investor once it has been properly verified.
- KRAs must take preventive precautions and conduct frequent system audits to ensure that unauthorized access to their databases is not possible.
KYC registration agency in India
A KYC Registration Agency is an organization or a private entity engaged in the business of accepting Know Your Customer (KYC) data, either directly or through outsourced arrangements, from clients of financial institutions, credit card agencies and other RBI approved entities.
KYC Registration Agency is responsible for performing the following functions
- Maintaining a central database of KYC records of all investors.
- Verification of documents and validations of information provided by investors, including obtaining additional information wherever necessary, prior to entering into the database.
- Updating the central database when there is any change in information such as an address, bank details, etc.
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