To safeguard investor interests and ensure adherence to industry best practices, SEBI has directed Asset Management Companies (AMCs) to transfer non-demat mutual fund redemption amounts and Systematic Withdrawal Plan (SWP) proceeds only to the bank account linked to an investor’s folio.
As a result, investors will now not have the option to select a Bank account where they wish to receive the redemption amount. The funds will be transferred to the bank account linked with the folio.
Key Highlights
1. Due to changes in the redemption process, there may be delay in redemption payouts and status updates from BSE, AMCs, and RTAs. This can subsequently cause delays in status updates on the INDmoney platform.
2. AMC may request for additional documents before initiating redemption payout.
3. Incase of Failed verification / Bank account is closed, AMC's will send a cheque/DD for the redemption amount on the registered address linked with the folio statement.
Possible Impact
The impact of this change will be more to the investors whose folio-linked bank accounts are closed/ In-operative.
For example, if an investor initially started their mutual fund folio with a specific bank account and later deactivated that bank account, they would encounter difficulties when redeeming their mutual fund investments. For all mutual fund investors, the redemption amount will now be transferred solely to the bank account linked to their folios, eliminating the option to choose an alternative bank account for receiving the redemption as we execute Mutual funds in the physical mode of holding.
To know the bank account linked to your folio,
- Kindly visit the website of the Asset Management Company (AMC) in which you have invested.
- You can also find bank details in the fund statement sent to your registered email whenever the allotment of units for purchase orders is successful.
- If your total investment in the mutual fund is less than Rs 10 lakh, then you can see bank details in MF Central
- INDmoney will display your available bank accounts registered or linked to your folio while creating redemption orders.* [*subjected to availability of data]
- You can also download folio statement from the RTA’s (Registrar and Transfer Agents) - CAMS and KFIN
Procedure to Change Linked Bank Account
To change your linked bank account in your folio statement, you can process a change of bank request through MF CENTRAL. Please follow these steps:
1. Go to the MF Central website and sign up using your registered mobile number and PAN number.
2. Click on the "Submit Service Request" section and select "Change of Bank Account Details."
3. Choose the relevant folio number and enter the new bank account details.
4. Upload the canceled cheque leaves for both your new and old bank accounts.
5. Submit the change request. It will take 1-2 working days for MFCentral to update the change of bank status.
Please Note: This method is applicable only if your total mutual fund value is less than Rs 10 lakh.
If your AUM (total mutual fund value) is greater than Rs 10 lakh, you need to update the bank details in your folio directly through the AMC.
You can directly visit the AMC to update the Bank details in the folio or you can courier the documents directly to the AMC's to update the Bank details.
Documents Required to Update Bank Details at the AMC:
1. Change of Bank Form or a request letter from the respective fund house.
2. Old Bank Proof: This can be a canceled cheque leaf with your name printed, a bank statement, or a bank closure letter.
3. New Bank Proof: This can be a canceled cheque leaf with your name printed or a bank statement with bank attestation.
The change of bank requests will be processed within 7 to 10 business days by the AMC.
In case of any assistance or doubts, please reach out to support@indmoney.com