Mutual Funds – Change of Bank Mandate

Here is a video that explains about change of Bank Mandate :

Hi , my name is Shweta and I got your reference from my colleague who has been investing in Mutual funds based on your advice.

I have recently moved from Chennai to take up this new job.

I have been investing in MF on and off in the past three years…looks like I have to sort out some paper work and can I meet you today

Advisor : Sure .. Let’s meet up by 5 pm in your office.

Shweta : As explained , I moved to Delhi a couple of months back . All my investments so far were done through my bank account in Chennai.

In my current job I am receiving my salary in a new bank account.. I am still wondering whether to keep my account opened in Chennai as well as this and I am not a big fan of many bank accounts.I have invested in mutual funds with the bank account opened in Chennai.

What is the best way to manage the bank accounts and my mutual fund investments?

Advisor :  There are two ways. You said you are not very keen to have too many bank accounts, and if you plan to close the Chennai bank account, then you need to update the new bank account details in your mutual fund accounts?

Shweta : How difficult is that?

Advisor : Its quite simple. You can provide a letter for change of bank to Mutual Fund or to CAMS office. There are some supporting documents which are required.

Shweta : Oh…Supporting documents? What are they?

Advisor: Don’t worry. There are options. Along with your change request letter, you need to provide original cancelled cheques of your old and new banks bearing your name. If the cheques do not have your name printed on it, then you can attach the latest bank statement which is not older than 3 months or the latest bank passbook with current entries not older than 3 months. If both are not possible, you could provide a letter from the Bank manager duly signed in their letter head with bank seal affixed. All documents should bear your name and bank account number.

Shweta :  It appears pretty simple. I was thinking anyways to do some redemption in the next couple of days.. I will give a redemption request and also submit the change of bank mandate at CAMS office.

Advisor : I am afraid you can’t do it.

Shweta : Why so?

Advisor: To mitigate the risk of bank change requests accompanied during redemptions, a redemption with a change of bank mandate request will not be processed together. This is to protect the investor’s interest. Such requests go through a mandatory verification process of authenticity of the investor before the proceeds are paid.

Shweta :  So when will get the redemption?

Advisor:  It can take up to 10 days or the completing the verification by the mutual fund whichever is earlier.

Shwetha :  You said in the beginning that there are two ways to handle.. What is the other one?

Advisor : Mutual Funds offer a facility for your to register up to five bank accounts in your folios.

A form is available at all mutual fund websites and for the registration of multiple bank accounts. You simply have to  fill, sign and submit with the same set of attachments  which I mentioned earlier.

Shwetha : That’s great ! I can keep both my Chennai account and this new account. Isn’t it?

Advisor :  While doing the registration, you can also instruct CAMS to mark any one of such account as Default, which will receive your  redemption proceeds, till the time you change it.

Shweta : I think I will go with the second option of keeping both my Chennai and Delhi accounts active. Thanks a lot for your valuable inputs.


Published by

Sudarshan Ranganthan

Breaths Investments, Suggests Wealth Creation Ideas, Lives on Law Of Attraction

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