Demat, Trading Accounts With Pending KYC Will be Deactivated from 31st July
Moneylife Digital Team 29 July 2021
Demat and trading account holders have been advised by depositories to complete their know-your-customer (KYC) details by 31 July 2021. Failure to do so would result in deactivation of their accounts, warns Central Depository Services Ltd (CDSL) and National Securities Depository Ltd (NSDL).
 
Stock broking firms and depository participants have been sending emails and letters to their clients, including demat and trading account holders, to complete or update their KYC details before the expiry of the deadline to avoid deactivation of their demat or trading accounts.
 
As per circulars issued by both CDSL and NDSL in April 2021, certain KYC attributes must be updated mandatorily before 31 July 2021. These include, name, address, permanent Account Number (PAN), valid mobile number, valid email address, and income range.
 
All these six fields have been made mandatory for new accounts opened from 1 June 2021. 
 
For existing accounts, depositories had been asked by the Securities and Exchange Board of India (SEBI) to verify that all the six fields are updated and complete and necessary communication is sent to the clients to update the same before 31 May 2021.
 
With respect to PAN, the circulars noted that the requirement of mandatory submission by clients for transactions in the securities market will continue to apply with permitted exemptions. Investors have been asked to verify their PAN online via the income tax portal.
 
In case these details are not updated, then the demat account will be deactivated by the depository and will not be activated till the demat or  trading account holder updates these details.
 
As per emails sent by the Stock Holding Corp of India Ltd (SHCIL) and ICICI Bank demat services to their clients if KYC details with regards to PAN is to be updated, then one should ensure that their PAN is linked with Aadhaar in the income tax database.
 
Account holders have been asked to choose and specify as to which income range their income falls in from a list given in the email. 
The list of income ranges from which account holders must choose, as per the email, are…
 
For individuals (annual):
 
a) Below Rs1 lakh
b) Rs1 lakh - Rs5 lakh
c) Rs5 lakh to Rs10 lakh
d) Rs10 lakh to Rs25 lakh
e) More than Rs25 lakh
 
For non-individuals (annual):
 
a) Rs20 lakh
b) Rs20 lakh to Rs50 lakh
c) Rs50 lakh to Rs1 crore
d) More than Rs1 crore
 
Failure to comply will result in classification of such accounts as non-compliant accounts. 
 
Comments
kcganga2108
3 months ago
They better extend the period for their inefficient way of communicating. All accounts were opened after complete KYC and merely because some additional information has now been mandatory for new accounts it does not mean existing accounts are benami holders.
Dilip Modi
3 months ago
Although the circular itself was issued in April 2021, our particiapnt did not send the mail till 12 July 21 under the heading of "registration Form for E mail ID Updation_NSDL pdf", which makes one thing yet another mindless paper exercise when the acount already had all the personal info. Only when asked to state the SEBI Rule that the actual SEBI Notice was issued on 26 July 21. Then a panic to get the paper forms duly signed back!
prasanna
3 months ago
None of the Depository Participants informed us
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