The pro-active approach of the MF industry was successful in preventing any major disruption for mutual fund investors due to bank mergers.
The mega bank mergers involving 10 public sector banks, which came into effect in April led to changes in bank account details of customers of some of these banks. The changes were mostly in IFSC codes. Customers of only two banks — Dena Bank and Vijaya Bank — saw a change in their bank account numbers.
MFDs told Cafemutual that IFSC and MICR changes were automatically updated by AMCs and RTAs with help of bank. However, there have been issues where bank accounts have been changed largely due to non-issuance of new cheque book from the concerned banks due to lockdown restrictions.
"The main problem is that some investors have not been able to go to banks and get their new cheque books, passbooks and other account details due to covid," said Mumbai MFD Azeem Jagani of Composite Investment Services.
However, the MF industry has been executing transaction in most of these cases. "There are a few Vijaya Bank cases. The redemptions are taking time but it is happening at a slower pace," said Udaipur MFD Rahul Jain.
Efforts are still on
The two leading registrar and transfer agents - CAMS and KFintech said they have kept the process open for investors and MFDs to update the bank details.
"Investors have been provided with a digital facility to update the bank details on CAMS website. We are also in touch with the Bank of Baroda (Dena Bank and Vijaya Bank have been merged with Bank of Baroda) to receive the updated account numbers. Also, we have been sending reminder emails to such investors. As of now, there are no disruptions in transactions," CAMS said.
"All merger details have been updated in our systems. AMCs have helped us in getting the updated IFSC details. Incremental changes as required by investors can always be submitted in our branches," KFintech stated.
MFDs are also making efforts to resolve these issues. "We have been guiding investors having bank accounts in these banks to get details of new banks," said Jagani.
