Investment

This query is : Resolved

Report Abuse Follow Query Ask a Query

Querist : Anonymous

Querist : Anonymous (Querist)

02 February 2011 If there is any Investment which requires no formalities such as KYC etc

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
Follow

02 February 2011 You can give me a loan to somebody without any formality. These type of query cannot be replied, If you have to invest, you have to filup some forms.

Querist : Anonymous

Querist : Anonymous (Querist)

03 February 2011 U mean to say if person has no identity proof/Old age Persons, he cannot invest anywhere else in his life?????Even after getting done all compliances ,I know many companies who defaults in making payment intentionally???
Think

Upgrade to CAclubindia Pro. Subscribe Now!

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
Follow

01 August 2024 Investing without formalities such as KYC (Know Your Customer) checks is generally not feasible due to regulatory requirements aimed at preventing fraud, money laundering, and other illegal activities. Here's a comprehensive overview of the situation:

### **Investment Requirements and KYC Compliance**

1. **Regulatory Requirements:**
- **KYC Norms:** Financial institutions and investment platforms are required to follow KYC norms under regulations set by authorities such as the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), and the Financial Action Task Force (FATF). These norms include verifying the identity of investors to ensure compliance with anti-money laundering (AML) laws.
- **Documents Required:** Typically, KYC involves providing identity proof (Aadhaar, passport, voter ID), address proof, and sometimes additional documentation based on the investment type.

2. **Old Age Persons and KYC:**
- **Special Considerations:** Even for elderly individuals, KYC is necessary to invest. Institutions may offer assistance with the process, recognizing that older individuals might face challenges in gathering documentation. They may provide additional support to facilitate compliance.

3. **Alternative Investment Options:**
- **Government Bonds:** Certain government bonds or schemes might have simpler requirements compared to private sector investments. However, KYC will still be required.
- **Post Office Savings Schemes:** These often have lower KYC requirements and can be more accessible for elderly individuals.

4. **Issues with Companies Defaulting Payments:**
- **Regulatory Recourse:** If an investor faces issues with companies defaulting on payments, there are regulatory and legal avenues available. This includes filing complaints with relevant financial regulatory authorities or taking legal action.
- **Due Diligence:** Before investing, conducting due diligence on the company’s credibility and financial health can help mitigate risks.

### **Steps for Individuals Facing KYC Challenges:**

1. **Seek Assistance:**
- **Financial Advisors:** Consult financial advisors who can assist with navigating the KYC process.
- **Institutional Help:** Reach out to the financial institutions directly for support in completing KYC.

2. **Use Simplified KYC Processes:**
- **Digital KYC:** Some institutions offer digital KYC processes, which might be simpler and more accessible.

3. **Government Schemes:**
- **Explore Government Programs:** Look into government schemes that might have relaxed or simplified KYC norms.

### **Summary:**

- **KYC Compliance:** Most investments require KYC due to regulatory mandates.
- **Alternative Options:** Explore government bonds, post office savings, or seek assistance to meet KYC requirements.
- **Handling Defaults:** Utilize regulatory channels to address issues with companies defaulting on payments.

Investing without KYC is generally not allowed due to regulatory requirements. However, support systems are available to help individuals, including the elderly, meet these requirements and secure their investments.