Nilekani panel recommends simplifying KYC process for mutual fund investing

The Reserve Bank of India’s (RBI’s) committee — led by Infosys co-founder Nandan Nilekani — has recommended simplifying the know-your-customer (KYC) process for mutual fund (MF) investing. The committee has said that a KYC-compliant bank account can be used for opening an MF account, provided the investment and refund are routed through the same account.

Industry experts say the move will ease KYC compliance for MF investors and give fillip to MF penetration ‘beyond the top 30’ cities — widely-known as ‘B30 cities’ in industry parlance.

The high-level committee on deepening of digital payments in its report said: “There are various use cases, where the industry could comply with the Prevention of Money Laundering Act requirements without friction… for certain use cases, a simple KYC process may be used… for instance, opening an MF account by funding it from a KYC-compliant bank account.”