Aiming to ease procedural hurdles that investors face, market regulator the Securities and Exchange Board of India (Sebi) today said it was in talks with other regulators, including RBI and Irda, for common know-your-customer norms for the financial sector.
"We are in dialogue with the banking regulator, insurance regulator. We are working towards that. In the near future one KYC with any one of the KYC Registration Authority (KRA) will suffice for all the transactions across spectrum of the financial sector, Sebi Chairman UK Sinha said at the CII's AGM here.
Sinha said Sebi was in talks with regulators in this regard and the common KYC may come soon.
"The long-term plan, on which we have already started working, is how to ensure that for all the transactions in the financial sector...Can the same KYC suffice?" he added.
At present, there are different requirements and yardsticks for KYC in the financial sector.
However, for securities transactions Sebi already has come out with a common KYC. At present, there are three KRAs. If an investor registers with one of the KRAs, then for any other transaction in the securities market he does not need to go for another round of KYC.
On retail participation, Sinha said one of the reasons for less participation was lack of awareness. "We are going to launch a very massive drive towards investor education and we would be very happy if agencies or individual corporate start cooperating with us in spreading that message," he added.
He also pointed out that in recent times, a large number of Indians have started to rely on gold as a safe asset in comparison to other financial assets.
This is primarily because investors are losing confidence in the market and there is lack of awareness about various financial assets, he said.
He said in order to motivate people to invest in capital market, there is a need to provide investors with good quality financial assets.
"Sebi will ensure a reliable system whereby people are assured that there are uniform rules of the game and if these rules are not maintained they will be taken to task in order to increase market confidence," he said.
