New KYC Rule for Mutual Funds In India 2025

March 13, 2025 by Anas in Mutual Funds 0

If you are reading this blog, I assume that you must already be investing in mutual funds. As a mutual fund investor, are you struggling to comprehend the new KYC rules for mutual funds that came into effect on April 1, 2024? As per this rule, an investor’s KYC (Know Your Customer) status has been divided into three groups: validated, verified, and on hold.

Furthermore, investors whose KYC status is validated need not do anything. They can seamlessly perform all of their investment transactions. On the other hand, investors with KYC verified and on-hold status need to re-submit their KYC application either online or offline using their PAN and Aadhar card to get their KYC validated status.

Step-by-step process to navigate the KYC rules for mutual funds

If you have invested in mutual funds and you are not aware of the new KYC rule, here is a step-by-step process to assist you in this situation.

1. Check your status first:

Firstly, you need to check the status of your KYC. To do so, you can log in to any KYC Registration Agency (KRA) site or any mobile application like Carvy, CAMS, CVL, or NDML. As stated in the introductory paragraphs, KYC Statuses are classified into three categories. Let’s discuss them in detail.

2. KYC Validated:

KYC Validated investors are not required to do anything extra. They can make transactions as usual.

3. KYC Verified:

In case you see your KYC status as verified, you will see no impact on your existing investments. But, in order to make new investments, investors need to submit their KYC documents again.

If your KYC was done using Aadhaar, you’re all set—no need to repeat the process for new transactions. Simple, right? But if your KYC was done with non-Aadhaar documents, you’ll need to verify it again every time you apply for a new scheme. It’s a small step, but it ensures everything stays smooth and secure.

4. KYC On-hold:

If your KYC status shows “on hold,” it means all your financial transactions—even in existing mutual fund schemes—are temporarily restricted. No new transactions can happen until you update your KYC. Don’t worry, though! The process is simple. Just submit any officially valid document (OVD) like your Aadhaar card, Passport, or Voter ID at the nearest AMC branch or KRA. Once done, you’re back on track to grow your investments in a hassle-free manner!

How to do your KYC online?

To complete the KYC, you need to just log in to any mutual fund website and head to the ‘Modify/Update KYC’ page. Thereafter, follow the below-mentioned steps—

Here’s a simple step-by-step guide to complete your KYC online. For instance, we are using HDFC Mutual Fund’s website, you can use any other fund’s website:

Step 1: Visit HDFC Mutual Fund’s KYC page.
Step 2: Enter your PAN and date of birth.
Step 3: You’ll be redirected to another site. Now, you need to keep these documents handy:
- PAN card (proof of identity).
- Aadhaar (proof of address). Make sure your mobile number and email are linked to Aadhaar.
- Other documents (if needed), like proof of marital status change or father/spouse’s name.
- A signature on white paper or digitally using a mouse/hand.
Step 4: Allow access to your device’s camera, location, and microphone. Check the box and click “I have these, continue.”
Step 5: Your current email and mobile number will appear. Click “Continue.”
Step 6: Upload your PAN as proof of identity.
Step 7: You’ll be redirected to DigiLocker. Enter your Aadhaar number and captcha code. An OTP will be sent to your registered mobile and email. Enter the OTP (valid for 10 minutes). Then, create a 6-digit PIN on DigiLocker.
Step 8: Give consent to the KRA agency to verify your information.

Once done, your KYC process is complete! The KRA agency will update your status to “KYC Validated” in 10-15 days. Simple, quick, and you’re all set to keep investing without any trouble!

How to complete your KYC offline?

For traditional investors who are not so tech-savvy, the Association of Mutual Funds in India (AMFI) has outlined clear steps to complete their KYC as per KYC rules for mutual funds. According to AMFI, investors can download and print the KYC form from any Asset Management Company (AMC), Registrar and Transfer Agent (RTA) offices, or the AMFI website. After filling in the required details, they need to submit the form along with necessary documents such as Aadhaar, PAN, and others. This simple process ensures compliance and keeps your investments hassle-free!

List of officially valid documents for KYC

Here is the list of officially valid documents for an investor to abide by the new KYC rules for mutual funds:

Driver’s License
Proof of possession of Aadhar number
Passport
Voter ID card
Job card issued by NREGA and signed by an officer of the state government.
Letter issued by the National Population Register containing the details of name/address.
Any other document specified by the central government.

KYC rules for mutual funds for NRI investors

The new KYC rules for mutual funds have made investing in mutual funds a bit of a challenge for NRIs (Non-Resident Indians). Unfortunately, these rules have unintentionally created roadblocks for the Indian diaspora. Here’s the twist: NRIs and OCIs (Overseas Citizens) with foreign mobile numbers are exempt from Aadhaar-linked OTP verification—but only if their PAN reflects their foreign residential status.

However, the mandatory Aadhaar validation has become a major hurdle for many. Why? Because Aadhaar authentication often requires an OTP, which can only be sent to an active Indian mobile number. Since many NRIs rely solely on international numbers, they’re unable to update their KYC status. It’s frustrating, but there’s hope—stay tuned for solutions to keep your investments on track!