DoP and AMFI Join Hands to Simplify KYC for 24 Crore Mutual Fund Investors

In a landmark move for India’s financial sector, the Department of Posts (DoP), under the Ministry of Communications, and the Association of Mutual Funds in India (AMFI) have signed a Memorandum of Understanding (MoU) to streamline Know Your Customer (KYC) compliance for millions of mutual fund investors across the country. The agreement, signed on 17 July 2025 in Mumbai, is set to transform how KYC processes are handled, particularly in remote and underserved areas of India.

Signing of the MoU

The MoU was formalised by Ms. Manisha Bansal Badal, General Manager (Business Development), Department of Posts, and Mr. V. N. Chalasani, Chief Executive, AMFI. The ceremony, held in Mumbai, was hailed as a historic milestone in financial inclusion, marking the convergence of India’s expansive postal infrastructure with the mutual fund industry’s expertise.

According to AMFI data as of 30 June 2025, India’s mutual fund sector oversees more than 24.13 crore folios, including 19.04 crore in Equity, Hybrid, and Solution-Oriented Schemes. The scale of these operations highlights the importance of efficient KYC management, particularly given the rapid growth in investor participation.

Rapid Growth in Mutual Fund Investors

India’s mutual fund investor base has been growing at an extraordinary pace. In recent years, annual net additions have surged:

• 4 million new investors in FY23

• 6.9 million in FY24

• 9.7 million in FY25

This growth underscores rising awareness of mutual funds as an investment vehicle and the need for efficient, accessible KYC compliance. The new agreement is expected to benefit all Asset Management Companies (AMCs) under AMFI by helping them seamlessly validate KYC for both existing and new investors.

Role of the Department of Posts

The DoP, with its network of over 1.64 lakh post offices nationwide, will act as the frontline service provider for investor KYC. Services offered under the agreement include:

• Collection of KYC documents from investors

• Verification and attestation of self-attested documents

• Assistance in filling KYC forms

• Transfer of documents to AMCs for processing

This arrangement will ensure that even investors in rural and remote regions have direct, convenient access to KYC services, eliminating a major barrier to mutual fund participation.

AMFI’s Role and Investor Benefits

AMFI, representing the entire mutual fund industry, will coordinate with its member AMCs and KYC Registration Agencies (KRAs) to ensure investors achieve “KYC Validated” status. This will particularly benefit legacy investors whose accounts may otherwise be frozen due to incomplete or outdated compliance records.

The initiative also strengthens regulatory compliance and aligns with SEBI’s mandates on investor protection and data security. Confidentiality and strict safeguards have been built into the agreement, ensuring the safe handling of sensitive personal and financial data.

Statements from Leaders

Speaking at the signing, Ms. Manisha Bansal Badal said: “This collaboration harnesses our extensive postal infrastructure to support financial inclusion and simplify KYC processes for investors nationwide.”

Echoing her remarks, Mr. V. N. Chalasani highlighted the significance of the partnership: “This MoU marks a significant step in ensuring compliance for legacy investors in even the most remote corners of the country. It will help revive dormant folios and enable investors to continue their journey in mutual funds seamlessly.”

Duration and Future Prospects

The agreement, effective for one year from July 2025, is renewable and designed to evolve with the industry’s needs. By leveraging postal services and expanding the mutual fund industry’s reach, the initiative is poised to set a new benchmark in investor servicing, operational efficiency, and financial inclusion.

As India continues its journey towards deeper financial penetration, the DoP-AMFI partnership may serve as a model public-private collaboration, demonstrating how legacy institutions like India Post can be modernised to deliver cutting-edge financial services.