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MIN is more pain than gain
Ashutosh Joshi
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January 22, 2007 13:36 IST

"Tell me, why should I prove my identity again and again. Where I stay, what's my income and where I invest?" asks an agitated Ameya Mehta while coming out of a Churchgate-based point of service location, which accepts the Mutual Fund Identity Number applications.

The Association of Mutual Funds in India mandated this identification for investors, who want to invest more that Rs 50,000 in a single instalment in any scheme.

So now, along with the 20,000-30,000-odd MIN allottees, Mehta holds a PAN number, DP Client ID, Unique Client code and Unique Identification Number under the MAPIN initiative.

So, in a globalised world, which dreams of unique identities and shedding diversities, an investor like Ameya holds at least five-six numbers to prove his identity while investing.

What is MIN?

In a hurried attempt to meet the Know Your Client norms prescribed by the Securities and Exchange Board of India, the AMFI along with 30 fund houses in the country finalised the idea of a unique number to identify investors.

At present, the eligibility criteria is wide, which means only individuals and corporates looking to invest more than Rs 50,000 in one scheme at a go, would have to get MIN.

However, if one invests various amounts into same scheme at different intervals or into different schemes crossing the prescribed limit, he is not required to meet the identification.

This diktat is for all fresh investments above the Rs 50,000 mark coming in the present year and onwards, while investments prior to 1 January, 2007, have been exempted from it. However, if, the SIP instalment crosses the eligibility limit, MIN is a must.

The MIN form seeks various information from the investor, including compulsory disclosure of PAN, contact details and gross income bracket. What a fund company needs to do with its investor's gross income is unfathomable.

Besides, the MIN applicant has to provide an attested photocopy of proof of his address, identity (which includes Passport, PAN, Election Voter card and similar photo identifications) and a photograph.

As per the information on the AMFI website, the applicant need not personally visit the point of service and can submit the documents through a representative and avail of the MIN in an hour on submission and verification of the documents.

What's the reality?

MIN issue faced hurdles since the beginning. Fund houses, including the likes of UTI, Reliance and Franklin, were keen to design their own set-ups for issuing MIN. There was also issue over who would bear the cost. However, at present the investor is not hassled about this, as fund houses are footing the bill.

Given the Rs 50,000 criteria, most corporates, NRIs and institutional investors would have to avail of the MIN. Normally, for a well-sold equity scheme, the participation of retail individuals investing more than the prescribed limit stands around 5-10 per cent.

CDSL Ventures, which has been given the task of MIN allotment, says it has issued around 33,000 MINs till date and is expanding its point of service through brokerages and nationalised banks' networks. However, there are lots of Ameya Mehtas who are clueless about the need for MIN.

"In a country that calls itself the IT capital of the world, is it not possible to simply convert the UIN/MAPIN into a MIN? Should not a rose by any name smell just as fragrant?" asked a baffled investor S Anand in his communication to Sebi, the finance ministry and the media.

Amfi-CVL had planned to issue the MIN across counters, but in reality investors have to delay their investments at least by 10-15 days as a flood of applications delayed the MIN issuances.

"There has been slight delay... within 15-16 working days, we have allotted 33,000 MINs. We are spreading our network," said CVL CEO Cyrus Khambata.

Even though, the AMFI maintained that it is making best attempts to remove the bottlenecks and smoothen the procedure, bottlenecks persist.

Despite the AMFI coming out with specific guidelines, point of services are following different policies, mostly regarding submission of documents.

Some PoSs in Mumbai clearly mentioned that they are only accepting photographs with a white-background as their system cannot scan ones with dark or coloured background.

"AMFI came out with these guidelines on 27 December giving investors less than a week to meet the norms. Sebi gave more than a year for demat account holders to submit their PAN, carried a planned media campaign still more than 15 lakh (1.5 million) accounts are frozen. Amfi should have devised a planned investor education programme and spread the awareness...this way MIN could land in trouble," said a top mutual fund distributor.

What's next?

Recent news reports suggest that the government might review the situation as large number of investors are peeved over the new identification. Industry sources reveal that there is a proposal to link the data information of MIN with the PAN itself, whereby an investor applying for MIN, would get his PAN as mutual fund identification.

Besides, there is a talk that the government could review the MIN decision. However, AMFI chief A P Kurian said that there was no such development.

But in the days of convergence, MIN rollout has once again exposed issues that remain to be a challenge for the nation. Lets converge, not diverge.

What's on

The AMFI along with 30 fund houses in the country finalised the idea of a unique number to identify investors.

The MIN form seeks various information from the investor, including compulsory disclosure of PAN, contact details and gross income bracket.

CDSL Ventures, which has been given the task of MIN allotment, says it has issued around 33,000 MINs till date

Fund houses, including the likes of UTI, Reliance and Franklin, were keen to design their own set-ups for issuing MIN. Powered by
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