Customers are being harassed by banks & AMCs to submit KYC documentation despite furnishing relevant information beforehand
If you are an investor in a mutual fund or a credit card customer of a bank, chances are you have already been contacted by the company concerned to furnish a bunch of documents as proof of your identity. It does not matter if you have already submitted the documents to your broker or agent. This annoying facet is an inevitable outcome of the Know Your Customer (KYC) regime brought upon bankers, mutual fund companies and telecom operators.
Repetitive documentation and filing has ticked off hundreds of investors. An annoyed investor told Moneylife, “Recently, various asset management companies (AMCs) and banks have started asking me to furnish details of KYC certification along with documentary evidence. This was despite obtaining my certification from Central Depository Services Ltd (CDSL) two years back. When I requested them to obtain the same from CDSL directly in order to avoid unnecessary paperwork and duplicated effort to verify/re-verify the KYC particulars, they seemed a bit upset.”
Another investor had a similar experience. He said, “When I open an account with a broker, I submit all the details as required under KYC. In fact, the broker's representative has personally collected all the details after meeting me. So, when you are again asked to submit the same set of documents, it is enough to annoy you. My simple request to SEBI is, when investors have opened trading accounts with large brokerages and after satisfying all the KYC conditions, they should not be made to go through with this procedure again.”
Sources from the Reserve Bank of India (RBI) said that customers should comply with the requirements as it would benefit them in terms of safety, security and seamless flow of transactions. With SEBI piling the pressure on banks and AMCs to furnish KYC documentation of customers, these companies have been forced to round up customers for filing necessary documents.
A credit card customer of SBI recently received a letter from the bank seeking various documents under the KYC norms, despite the fact that all his details are already with the company. The letter stated that as per RBI guidelines issued on KYC norms, it is mandatory to periodically update the records with current information on the customers.
The basic purpose of KYC was to prevent identity theft, money laundering, terrorist financing, etc. This involves verifying customers' identity and address by asking them to submit documents that are accepted as relevant proof.
However, in most cases, KYC has only served to complicate procedures; requiring huge paperwork on part of service providers and making customers run from pillar to post for filing necessary or sometime irrelevant documents. To put things in perspective, an investor is required to sign around 80 times on a KYC form. The sheer volume of documentation necessitated acts as a huge deterrent for many investors.
An independent financial advisor (IFA) had earlier disclosed to Moneylife, “I have a customer who wants to invest Rs50,000 each in five different funds. For this, I have to give five different KYC documents for him and his wife, which is absurd. The issue here is, if you know the person’s surname and father’s name, date of birth and PAN card, there can only be one person whose details match. So why is the need for this unnecessary repetitive work?”
India is expected to produce the most new multinational companies, overtaking China as the emerging world's largest source of new multinationals
India may overtake China as the largest source of new multinational companies (MNCs) from the emerging markets, with over 2,200 domestic firms forecast to open overseas operations over the next 15 years, says a PricewaterhouseCoopers report.
According to the report titled ‘Emerging Multinationals’, the competitive landscape is set to be transformed over the next decade as Indian and Chinese multinationals lead the way in seeking new markets outside their home markets, reports PTI.
“India is expected to produce the most new multinational companies, overtaking China as the emerging world’s largest source of new multinationals. Over 2,200 domestic companies are projected to open operations outside over the next 15 years (between 2010 and 2024),” the report says.
Driven by the rapid pace of globalisation and revolution in information and communications technologies, the number of companies from the emerging markets choosing to set up operations abroad has increased in the past five years.
The report suggests this trend is expected to continue over the next 15 years, as new multinationals from emerging economies rise in prominence on the global economic stage.
“It is encouraging to know that India will replace China as the largest source of new MNCs in the emerging world from 2018 onwards. The key drivers for this are the relative increase in both investment intensity as well as openness that the domestic economy offers,” PwC India leader for markets and industries Jairaj Purandare said.
India and China would also be joined by an array of companies from Singapore, Russia, Malaysia and South Korea in terms of setting up MNCs.
According to the report, some of these new MNCs would become international powerhouses and would require services all over the world; for example, to support their IT and telecom networks.
The PwC report says more and more new MNCs are moving straight into the developed economies as opposed to setting up their first foreign operation in a neighbouring emerging market.
The global consultancy major used econometric techniques to project the number of new multinationals arising from a sample of 15 emerging economies over the next 15 years.
The countries analysed are Argentina, Brazil, Chile, China, Hungary, India, Malaysia, Mexico, Poland, Romania, Russia, Singapore, South Korea, Ukraine and Vietnam.
Courts have imposed penalty to the tune of Rs63.84 lakh for non-filing of these documents by these companies in the year 2008-09
Over 3.7 lakh companies have not filed annual returns and balance sheets, which is mandatory under the Companies Act, for the fiscal year 2008-09, Parliament was informed today, reports PTI.
While the annual returns and balance sheets for the year 2009-10 are not yet due for filing, there are 3,70,196 companies which have not filed balance sheets, and 3,71,110 companies which have not filed their annual returns, corporate affairs minister Salman Khurshid said in the Lok Sabha.
In a written reply in the House, he said that the courts have imposed penalty to the tune of
Rs63.84 lakh for non-filing of these documents by the companies in the year 2008-09.
The balance sheets and annual returns are required to be filed with the Registrar of Companies (RoC) by all the companies registered under the Companies Act, 1956, he said.
Similarly, for the fiscal ended 2007-08, over 3.03 lakh companies have not filed their balance sheets, while more than 3.07 lakh companies have not filed their annual returns.
The penalties imposed by the courts for non-filing of these documents by the companies during 2007-08 stood at Rs88.17 lakh, Mr Khurshid added.
Similarly for fiscal 2006-07, over 2.60 lakh companies have not filed returns and accounts and the courts have imposed a penalty of Rs94.66 lakh.