CAMS has set a redemption limit of Rs.10 lakhs a month on its digital platform myCAMS. The mutual fund transfer agency said that the rationale for this move is to mitigate cyber risks and is one among several steps that it is taking for strengthening its cyber resilience.
“The redemption restriction on myCAMS is in line with the evolving risk management framework that we have deployed,” CAMS informed Cafemutual in a mail.
However, this does not stop an investor from redeeming more than Rs.10 lakh in a month. CAMS said that if an investor wants to redeem more than Rs.10 lakh in a month, he could do it through other modes such as CAMS point of sales, AMC branches or AMC website.
CAMS said that since 99% of the redemptions on myCAMS platform is less than Rs.10 lakh a month, they have decided to go ahead with this limit.
Nevertheless, can CAMS put such restrictions in the first place? To understand this, we asked some industry experts their take on this issue.
Ashutosh Bishnoi, CEO, Mahindra MF, said that myCAMS is neither an AMC nor a distributor that takes commission. It is a platform for transaction in mutual funds and they can put a limit on redemption after taking into account the systemic risk involved in it. Had they been an AMC or a distributor, they could not have done that.
Seconding Bishnoi, Vishal Kapoor, CEO of IDFC MF said, “It is a channel specific limit, similar to the ones set for bank withdrawals. The intention behind the rule seems to be to limit any money that investors may lose if their account is compromised. As long as investors are aware of the limit, which is set at Rs.10 lakh per month, they can plan their redemption well in advance.”
