Many first-time investors wanted to invest in equities and equity-oriented instruments like mutual fund (MF) schemes when the markets fell – with the BSE Sensex dipping below the 26000 level – during the onset of Covid-19 infection in India, but were unable to do so as the nationwide lockdown was imposed soon, crippling all the services, except the essential ones.
Although the securities markets continued to function, offline investments avenues were closed, preventing new investors to complete the KYC process through conventional ways, while KYC-compliant existing investors were in a position to invest online.
The usefulness of online services – including eKYC supported by verification through videos – was realised in a hard way during the lockdown period.
While some RTAs and brokers/distributors extended their support to novice investors with the eKYC, but to provide a boost to online investment process, the competent authorities have granted CDSL Ventures Limited (CVL) approval to act as a local Authentication User Agency (AUA)/eKYC User Agency (KUA) with UIDAI.
The approval would provide a thrust to seamless online account opening using online Aadhaar based eKYC once the CVL AUA/KUA goes onstream and intermediaries register and go live as Sub-KUA, as CVL – a wholly-owned subsidiary of Central Depository Services Ltd (CDSL), the first listed Indian securities depository that facilitates the holding of securities in electronic form – is the first and one of the largest KYC Registration Agency (KRA) in India.
In association with Association of Mutual Funds in India (AMFI), CVL conceptualised, designed and implemented the KRA system for all mutual funds in 2008, and currently has over 2.25 crore fully digitised KYC records accessible to over 2700 intermediaries spread across the country.
Hence, the Aadhaar based eKYC service coupled with the Aadhaar based eSign service of CVL is expected to facilitate online account opening in a big way, which would also reduce the turnaround time for online KYC and account opening.
To facilitate the online process, CVL has developed an online account opening software, which may be used by intermediaries to provide on-line KYC and account opening services to first-time investors, using Aadhaar based eKYC and eSign.