Recently a colleague tried to change his bank details in a mutual fund folio. Not being in touch with the new rules, he was surprised when the request to change bank details in his account was rejected.
Being of vital importance, I wish to share the requirements for successfully registering a new bank account in mutual folios. In addition we will look at the new facility of adding additional bank accounts in your folios.
I. When you give a letter asking for the bank details to be changed:
The below documents are required along with your request letter for BOTH the new bank you wish to enter in the folio as well as the old existing bank account which is already registered:
An original cancelled cheque leaf where the account number and first unit holder’s name is printed on the face of the cheque (for both the old and new bank accounts).
OR
Since many banks do not print the customer name on the cheque, a copy of the bank pass book or statement having the name and address of the account holder (again for both the old and new account). The copy should be certified by the bank manager with his / her full signature, name and bank seal and contact number.
OR
A letter from the bank on its letterhead certified by the bank manager with his / her full signature, name, employee code, bank seal and contact number certifying that the unit holder maintains/maintained an account with the bank, giving details of the account (When the old bank cheque leaves / recent statements are not available).
If you do not wish to submit the originals, you may also bring a copy of any of the documents mentioned above along with the original documents to the Service Centres of the Fund. These can be verified over the counter and returned.
On checking with the Funds, the executives answering my calls were particular about these details. Explanation was given that avoiding incidences of fraud was the reason these details were required and while investors might be inconvenienced, they should look at these requirements as a means to safeguard their interest.
II. Register additional bank accounts in your folio
All Funds now offer a facility to register up to 5 bank accounts for individuals in their folios. A form is available at all fund websites for addition / deletion of bank accounts and this is to be filled, signed and submitted with the attachment described above as proof of the additional account(s) (a cancelled cheque leaf with name printed / bank statement attested by the bank manager or by the Fund counter staff).
Once you have registered additional accounts, if any account is closed at a later date, just fill the same form for deletion of an account. No attachment would be necessary.
Default Bank Account: Any one bank account should be chosen as a default bank where all dividends would be paid out. You may ask for a redemtpion to be paid to any of the accounts and if you do not mention any bank in the transaction form, it will be paid into the default account. It is recommended that all investors register all their bank accounts in their folios.
Point to note:
If you submit a change in bank details along with a redemption, it is likely that funds do not process the change in bank details and pay the proceeds to the existing account.
