Know your customers, (KYC) has launched a centralized norms system for the customers in almost all of the financial sectors like Mutual funds, Insurance sector, banks, and much more. According to the new system, a customer can easily move from one sector to another once he or she has filed his or her details. He or she doesn’t have to fill up the details again and again.
This new rule has shattered Mutual funds sector because most of the mutual fund customers are not using this KYC norm and from now they will have to follow this centralized system.
This new rule has removed the unnecessary burden and the customer can now easily switch from one entity of financial sector to another. He or she doesn’t have to fill the KYC documents again and again.
According to the executives of the Mutual fund, they will have to face lots of operational pressure as it not easily to switch to this centralized KYC system. In order to shift an already existing customer of the Mutual fund to this centralized KYC norm, Mutual fund house will have to spend Rs.40/person. Earlier, executives have thought that this process would be comparatively cheaper and faster than any other process but now they have to face a lot of financial and operational pressure.
As per the Chief Operations officer of Mutual funds, the online process should be faster and cheaper but with this new KYC system, things will become costly and the process would take time to fill the details as per the financial sectors. Till now, means before this centralized system, usually, 3-4 days’ time was taken to complete the formalities but after the implementation of this new rule, customers will have to wait for 7-10 days’ time.
According to the CEO of a reputed Mutual fund house, other financial sectors also needs a system where every sector will have to bear the same extent of the burden on their shoulders. As of now, only Mutual fund houses will have to take this pain. This has not only impacted their performance but their net profit has reduced too.
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