MF News NACH mandate will have a maximum validity of 30 years from Oct 1

NACH mandate will have a maximum validity of 30 years from Oct 1

NACH mandates used for new SIP registrations will have a maximum 30-year validity. However, the existing perpetual SIPs or perpetual SIPs created before September 30 will not be affected.

Karishma Gagwani Sep 9, 2023

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NACH mandates will now have a validity of a maximum of 30 years.

In a circular issued, NACH (National Automated Clearing House) said, “Validation will be built in the central system to accept only the mandates that are for a duration of 30 years or below.” These mandates give standing instruction to banks to auto-debit the SIP amount towards the specific mutual fund and this move is likely to introduce more robustness, believes NACH.

Hence, the ‘until cancelled’ option will no longer be available and investors will now have to mention a specific end date which cannot be more than 30 years from the date of issuance.

However, the existing perpetual SIPs or any perpetual SIP opened before Sept 30, 2023 will not be affected.Since the circular will be effective from October 1, 2023, these provisions are not relevant for existing SIPs. “This is applicable for all forms (physical as well as electronic) of mandates”, clarified NACH.

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11 Comments

Nishant Patnaik · 9 months ago `

Dear readers, your existing perpetual SIPs will not be affected by this change. This will come into effect from October 1, 2023.

Solomon Coutinho · 9 months ago `

What will have about those mandates that are registered upto 2099 but the SIPs for 5/10 years...

Will ALL those SIPs stop???

Another mess going to hit the MF industry....

Dixesh Shah · 9 months ago `

What the hell is going on with this people...system error and policy decisions they are making...including rbi,banks,sebi and distributors and clients have to bear this failed system

Solomon Coutinho · 9 months ago

These are collusion of Bankers and Insurers to make it inconvenient for Distributors/ Clients to do SIPs and promote RD & Ulips...

As though removal of Upfront, B-30, Introduction of Direct was not enough.

On the other hand, FM is congratulating business from B-30 areas... Under which cave does she live.

DEBRAJSENGUPTA · 9 months ago `

I guess both NPCI and AMFI is clear about the new rule which comes into effect from October,1. The new rule will be applicable for ALL New OTBM/NACH registration, both Online and Offline. The earlier mandates which had perpetual till 2099 would now automatically have validity of 30years from start date.

Vivek Mallik · 9 months ago `

Your article is confusing. Mandates and SIPs are two things. While Mandates can be 'until revoked', SIPs may still be for just one year. Or I may have a 'Perpetual SIP' and have a fresh Mandate without affecting the SIP.
At one place you write, perpetual SIPs will be discontinued. And at other you write NACH mandates cannot be more than 30 years. Please have clarity on such policy issues before publishing.

Nishant Patnaik · 9 months ago

Hi Vivek, these mandates are used to set up perpetual SIPs.

Vivek Mallik · 9 months ago

Thanks for the clarification, Nishant. But I still do not agree.
I may register a perpetual SIP and renew the mandate when its term expires without having to register a new SIP.

Rohit Makker · 9 months ago `

Even after filling the date correctly in the forms, the back office operation people were making the default entry in their systems as 2099.

SUNIL GUPTA · 9 months ago `

What will happen to the existing Enach/xsip/isip mandates which have been "Untilled cancelled" ?

Sravan Kumar · 9 months ago `

If I have an existing mandate upto 2099 after October 1st can I give only sip request upto 2099 by tagging existing mandate ?

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