The Benefits of CKYC

CKYC is an excellent concept. According to the C-KYC rules, new clients must provide additional information included in the C KYC system. It would eliminate the need for a new KYC procedure every time a customer wishes to purchase mutual funds, which can be inconvenient. The C-KYC will be a one-time event.

The KYC procedure will be centralised and streamlined. Once you’ve met the CKYC requirements, you’ll be given a single customer identification code, which you’ll use at every point of transaction where KYC is necessary. It is, without a doubt, an elegant approach to the KYC procedure.

For the finance industry, central KYC is a game-changer. With the adoption of C-KYC, KYC duplication can be avoided. The applicable issuing authority will validate the supporting documentation, which would result in more reliable data and a reduced risk of forgery. KYC processes would be far less expensive. C-KYC would be applicable across various financial industries, allowing investors with bank accounts to invest in mutual funds or any other sector without completing any additional KYC requirements.

It has been a blessing for a successful investment path. The government will give the Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) the authority to act and perform the functions of the Central KYC Records Registry (CKYCR), such as receiving, storing, safeguarding, and retrieving a client’s KYC records in digital form.

This reform will simplify the investment process, aid financial inclusion, and promote a saving and investing culture. Once implemented, c-KYC compliance will be added to the existing KRA process, a similar exercise.

Things that need to be Clarified or Improved

What the Sebi rules don’t say—and this is something that needs to be clarified—is what happens with KYC via Aadhar and OTP. In the KYC procedure, Aadhar was a great move. So, does the C-KYC work in tandem with the other processes, or is it a stand-alone system? These are some issues around centralised KYC that the sector has asked Sebi to clarify.

However, none of the CKYC criteria states do not talk about halting new transactions until CKYC is done. As a result, we anticipate business as usual and gradually implement any new regulations. Introducing a new system will always provide obstacles in terms of legality and implementation. However, once the requirements have been appropriately interpreted, we support implementing a shortened KYC procedure.

Creating a central KYC Registry is a good first step toward reducing KYC duplication in the banking sector. However, it is still only a first step and falls short in many areas. Your existing KYC is insufficient, and to migrate to the C-KYC, you must register a new KYC with an entity registered with the Central KYC system if you want to be a member of the C-KYC repository. 

Second, because the C-KYC has not identified the PAN as a mandatory identification, but Sebi has enforced it even for C-KYC, the primary purpose of the Central KYC, interoperability between participants, may not be attainable. Thus, if you complete your C-KYC process without a PAN, it will not be valid with capital market participants like mutual funds or your depository participant.

Conclusion

CKYC is a step in the right direction and will make life easier for the investors, but it still needs more clarification.

Financial security is a must for every investor. Women can invest their money in long-term investment options for building sufficient capital for their future. They must use their options wisely and conduct a proper study and research before investing in market-linked instruments. However, they need not employ such strategies while investing in instruments that offer stability and assured returns.

Here are some instruments that are the best investment options for women who expect high security for their invested capital:

1. PPF 

Seen as a long-term investment tool, PPF generates enough returns over the long term. You can invest anywhere from Rs. 500 to Rs. 1,50,000 in this investment scheme every year. As PPF is a government-sponsored scheme, it is completely reliable. However, its long tenor and strict withdrawal options may hinder your interim liquidity needs. 

2. NPS 

NPS diverts your funds in corporate bonds, FDs, government securities, and liquid funds. However, the choice of the percentage of fund allocation in these securities depends on you. Also, being a government-run scheme, it is trusted and generates a monthly pension after retirement. It also offers tax benefits as per section 80C of the Income Tax Act. 

3. Gold 

Women consider gold as a highly lucrative investment for the future. You can collect gold coins from different banks and authorized gold dealers. Coins of 5 grams, 10 grams, 20 grams, etc. are available. As the rates of gold tend to appreciate with every passing year, it can be considered as a good long-term investment option. 

4. POMIS 

Post Office Monthly Investment Scheme is also known as post office FD scheme. Its tenor is of 5 years and the minimum investment amount is Rs. 1,500. You can invest up to Rs. 4,50,000 in one account and up to Rs. 9,00,000 in a joint account. It is a highly advantageous scheme for homemakers and retired women as it allows them to withdraw the interest every month.

5. Fixed Deposits 

Fixed deposits are considered safe and their appreciation is not dependent on market factors. However, for earning sufficient returns, invest in corporate FDs such as Bajaj Finance FD. Bajaj Finance FD is the best FD for women as it offers an FD interest rate of up to 6.75%. Apart from a high FD rate, it assists you in taking care of the regular expenses by offering multiple interest payout options. The main benefits of investing in this fixed deposit scheme are highlighted below:

Offers Financial Security 

Bajaj Finance FD offers financial security as its returns are fixed. Also, the high ratings of FAAA/stable and MAAA/stable that it has received from CRISIL and ICRA make it a highly reliable scheme for women investors. 

Online investment method 

The method of investment is also quite effortless. Just open an FD account through an online FD form and verify your identity and address by sharing your CKYC number. Also, a 0.10% higher FD rate will be provided to you for preferring the online investment method. 

Easy liquidity 

Unlike investments like NPS, EPF, and PPF, Bajaj Finance FD offers easy liquidity to investors. You can withdraw your investment once after the completion of 3 months from the investment date. The option of managing your fund needs by availing of a collateral-free loan allows you to handle any unexpected crisis.

Women investors who want to invest in secure financial instruments can invest in NPS, PPF, EPF, or gold. However, to earn high returns while ensuring sufficient liquidity and a flexible investment tenor, you should invest in Bajaj Finance FD. It is offering a high-interest rate of 6.75% and the option of periodic payouts that assist you while managing your regular expenses. An unexpected crisis can be easily managed as it is a highly liquid investment option. You can also avail of a loan to take care of your emergency fund requirement. Bajaj Finance FD is a secure investment option as credit rating agencies consider it as a stable and secure investment avenue.