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Experts believe the tie-up could help resolve long-standing bottlenecks in KYC compliance, particularly in underserved regions
The agreement, signed on July 17, aims to streamline KYC compliance for approximately 241.3 million mutual fund folios, including 190.4 million equity, hybrid and solution-oriented schemes.
'This collaboration harnesses our extensive postal infrastructure to support financial inclusion and simplify KYC processes for investors nationwide,' said Manisha Bansal Badal, general manager (Business Development), Department of Posts.
Why does this matter for investors?
KYC compliance is mandatory for investing in mutual funds. Until now, offline investors had to visit asset management companies (AMCs) or registrar offices for document verification.
Under this initiative, postal employees will assist investors in:
Completing KYC forms
Verifying and attesting self-attested documents
Forwarding them to AMCs for processing
'This MoU marks a significant step in the industry's efforts to ensure regulatory compliance for investors residing in remote areas,' said VN Chalasani, chief executive, AMFI.
Experts see a big boost for participation
Financial experts say the tie-up could help resolve long-standing bottlenecks in KYC compliance, particularly in underserved regions.
'Enabling KYC at post offices is a strong move. In rural and semi-urban areas, trust matters more than tech, and post offices are trusted places. This will remove a key entry barrier for mutual fund investors in these regions,' said Navy Vijay Ramavat, managing director, Indira Group.
'For those whose KYC is stuck or rejected, this brings a much-needed physical touchpoint. Even in bigger cities, many people still struggle with digital-first norms. If executed well, this step can bring first-time investors into the fold, not just by simplifying KYC, but by making investing feel accessible, human, and local,' he added.
Niranjan Babu Ramayanam, chief operating officer, Anand Rathi Wealth Limited, believes this partnership could be a game changer,
'As per industry sources, there are many clients who have invested in the past but have not updated their KYC as per the latest regulatory requirements. With the widespread presence of post offices across the country, this MoU will help AMCs reach such clients and assist them in updating their KYC to restart investments.' he said
India added nearly 9.7 million new mutual fund investors in FY25. Experts say this initiative could unlock further growth, especially as Sebi's tightened KYC norms have left many investors unable to transact.
'This initiative will help resolve the KYC 'On Hold' or 'Rejected' statuses more efficiently, especially in rural areas where investors lack guidance to complete documentation,' said Ramayanam.
'There will be a substantial rise in SIPs from such investors once their KYC is validated.'
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