The mutual fund industry is working overtime to minimize the impact of banks merger.
Investors having bank account in eight banks -Dena Bank, Vijaya Bank, Corporation Bank, Andhra Bank, Syndicate Bank, Oriental Bank of Commerce, United Bank of India and Allahabad Bank will see changes due to mergers.
However, barring Dena Bank and Vijaya Bank, there will be no change in bank account, only IFSC code will be updated. RTAs have been updating IFSC code on their own in both bank account of investors and distributors.
Investors having bank accounts with Dena Bank and Vijaya Bank will have to update their bank account by submitting a change of bank mandate form along with cancelled cheque of old bank account or passbook and cancelled cheque of new bank at folio level to redeem their investments. However, things will get simpler as the industry has been closely working with payment aggregators and banks to ensure that there is no disruption in the process. Also, transactions like SIPs and lumpsum will not get affected.
CAMS said that it is coordinating with fund houses and investors to find ways to unilaterally update IFSC codes. "Emails and electronic links are being sent to investors where they can send us the new account number. We need a positive affirmation and input from the investors to proceed," said CAMS CEO Anuj Kumar.
"We are working at all the levels and hopefully we will be able to minimise the disruption," Anuj added.
KFintech is also making efforts to update the details of such investors. The RTA is setting up a process to reach out to investors either through the digital mode or physically.
"We will take consent of investors through a link and then proceed with the change of account," said Mario Roche, VP-DFS, KFintech. The RTA has already been receiving requests to update details from investors and MFDs. In fact, the number of such requests have almost doubled, said Roche.
Many MFDs have been putting in efforts to ensure their clients do not suffer due to merger of banks. They have been actively seeking details from such clients and passing them to the respective RTAs.
MFDs who receive commission in accounts of any of these two banks also need to update their details. "MFDs are actively updating their details as every month the brokerage is transferred to these accounts," said Roche.
