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PAN compulsory for demat accounts
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To tighten `Know Your Customer' norms
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From Oct 1, existing members to produce PAN for operating a/cs
DP staff asked to verify details personally
Mumbai
,
March 6
All demat account holders will compulsorily need permanent account number (PAN). The Securities and Exchange Board of India has directed the depositories to make PAN compulsory for all demat accounts that are opened after April 1.
Further, from October 1, the existing demat account holders will not be able to operate their accounts if they do not produce their PAN card.
This rule would be applicable to all demat account holders, including minors, trusts, foreign corporate bodies, banks, corporate bodies, FIIs and NRIs, said a circular from National Securities Depository Ltd. These measures are being taken in order to tighten the `Know Your Customer' norms, post the IPO scam.
Staff at Depository Participants' offices have been asked to personally verify the identity and address while opening demat account and the record of the person who carried out such verification should be made available.
The name of the demat account holder would be compared with the name appearing on the Web site of the Income Tax Department and clarification would be sought from the account holder if there is a mismatch, the circular said.
In the case of joint account, both account holders should have PAN cards. In case the account holders fail to provide copies of their PAN cards to the depositories before October 1, their demat account would be `suspended for debit' until PAN details are provided and verified, it said.
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