AMFI has reached out to National Payments Corporation of India (NPCI) and Indian Banks Association (IBA) to seek their intervention in helping AMCs migrate to NACH system in a smooth manner. NACH has replaced ECS from May 1.
NPCI is an umbrella organization for all retail payments system in India.
“It was brought to our notice that the industry lost some SIP mandates as they were not registered by a few banks on NACH system. We have requested NPCI and IBA to help in this matter. The issue should be resolved in a few months,” said C.V.R. Rajendran, CEO, AMFI.
Fund officials say that while the private sector banks have migrated to NACH, a few PSU banks are still facing teething troubles. “It is the early phase and there are some teething problems which should be resolved soon. There are some technical glitches while registering SIP mandates,” said Dinesh Khara, MD & CEO, SBI MF.
“Unlike private banks, PSUs can’t raise employee strength so quickly. Because the volumes are huge, PSUs are facing problem processing them faster,” said the operations head of a bank sponsored fund house.
The NACH system is expected to bring a lot of convenience to all the stakeholders in the industry. It is a faster method of SIP registration at less cost as compared to ECS. However, some distributors say that it is taking around 30 days to register SIP mandates on NACH. “AMCs are telling us that the system is not ready yet. It is taking 30 days to register SIP on NACH. We noticed that SIPs are not debiting in the first month and in the second month there are two debits in investors bank accounts,” points out a Mumbai based IFA.
Another Mumbai based distributor says that some of his client NACH mandates are not registered even after four months. “The system is not ready to process the volumes of NACH mandates. In some cases, SIP mandates are not registered for months and AMCs are asking us if they can debit all the lapsed SIP installments at one go. So investors are not happy with this,” said a Mumbai based distributor.
Also, distributors say that some investors are questioning AMCs and distributors as to why their banks are charging them a NACH registration fee. “Earlier, there was no ECS registration fee for investors. With NACH coming in, some banks have charged their customers a one-time NACH registration fee of Rs. 200-Rs. 250. This has irked some investors,” adds the above quoted IFA.
With NACH, SIP registration time is expected to reduce to up to 10 days.
NACH can help investors and distributors in a big way. Earlier, distributors had to register multiple mandates if their clients wanted to invest through SIP in say, four different schemes. With the new system, distributors can register four SIPs through one mandate. The process has become simpler even in case of lump sum investments.
Meanwhile, the industry is working on fixing the problems and hoping that the issues will be resolved in a few months.
