Meanwhile, it never ceases to amaze me that the same government, which has turned super-stringent about KYC norms for its own citizens, rushes to defend and justify completely non-transparent capital market investment by foreigners through Participatory Notes (PNs), which includes large chunks of tax-evaded Indian money that returns to India via foreign tax havens.

Left with no option but to fall in line, AMFI worked on ways to minimise the harassment to investors by creating a single database for submission of identification details and verification procedures by issuing a single MIN number that would be applicable across all mutual fund investments. It facilitated the process by mandating CDSL Ventures Limited (CVL) to create the database for issuing MIN numbers and the capital market regulator has presumably verified the systems to ensure that problems that it detected in the CDSL depository do not recur in this database.

Probably because AMFI was hoping to avoid another needless identification number, involving large infrastructure costs, the process seems to have been delayed until the end of 2006. Investors were notified about the need for to obtain MIN numbers only on December 21, 2006, giving them less than a week before it became applicable on January 1, 2007 under the Money Laundering Act.

But Kurien says that AMFI is working round the clock to avoid bottlenecks by increasing the number of Point of Service (POS) agents authorised to issue MIN numbers. It is negotiating with banks, Depository Participants and Registrars to act as POS agents so that the number of issuing centres can be rapidly expanded from the 140 that existed on Friday morning.

... contd.