The Securities and Exchange Board of India, on Tuesday, introduced a centralised mechanism to report the demise of an investor. This would be undertaken through the KYC registration agencies.
In accordance with a SEBI circular, an intermediary who receives notification of an investor's death from a nominee, joint account holder, or even a family member is required to obtain and verify the investor's death certificate and PAN. This should be completed by the next day after receiving the information and can be done through online or offline modes.
If the person notifying the death is unable to provide the required details, the account shall be kept on hold until such details are obtained. The status would be revoked only after conducting proper due diligence.
On verification, the intermediary shall make a KYC update request to the KRA on the same day to update the investor's status. It will also block all debit transactions from the investor's account. However, later, after contacting the investor, if the information turns out to be false, an update regarding the same should be made to KRA on the same day.
The KRA is also bound to undertake an independent verification of death before it blocks the account permanently. This includes verification of the death certificate as well as due diligence with other intermediaries.
Once the accounts are blocked permanently, the intermediary shall take the necessary steps for the transmission of the investment within five days.
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