How to update bank details in your folio

We sometimes hear an investor say, “I have changed my bank account and did not inform the Mutual Fund. I have received a dividend cheque with the old bank details printed therein.” Obviously, the investor would like the cheque to be resent with the details updated. For this, he/she must register the details of the new bank account in his/her folio.

Here is a checklist for investors to ensure correct and speedy payout of dividends and redemption proceeds.

Core-banking account number: There could be a change in bank details as an investor’s bank may have installed Core-Banking solutions. In such cases, even though there has been no change in bank account, the investor should remember to update the new account number in the folio(s).This can be done by sending a written request duly signed by the Unit Holder(s) along with a cancelled cheque leaf with the investor’s name and full account number printed therein.

IFSC Code: IFSC or Indian Financial System Code is the electronic address of the bank branch where funds would be transferred. It is an alpha-numeric code containing 11 characters, allotted by the RBI to uniquely identify bank-branches in India.

Investors who register their IFSC codes in their folios will be eligible to get electronic payouts through NEFT/RTGS. Attach a cancelled cheque leaf reflecting the code along with a signed request to get the same updated.

Mode of payout: While sending a request to update the IFSC code in the folios, investors may also request for the mode of payout of dividend/redemption proceeds in the folio to be changed to electronic. Opting for electronic mode for payout ensures faster, safer, and a definite, receipt of payout.

New bank account: If you are changing your bank account, please register the new bank details in your folio(s). To do this, investors should send a written request duly signed by the Unit Holder(s).

Along with such a request, proof of both the earlier and the new bank accounts should be attached in the form of cancelled cheque leaves with the investor name and account number appearing therein.

Registration of additional bank account(s)/deletion of bank account: Mutual Funds now offer a facility to individual investors to register up to five bank accounts in a folio.

To register additional bank accounts, investors would have to fill the registration form. Forms are available at the Mutual Fund web sites/Service Centres. Investors would have to attach a cancelled cheque leaf with their name printed therein or a copy of the bank passbook/statement of bank account containing the name and address of the account holder and account number. This copy should be certified by the bank manager with his/her full signature, name, employee code, bank seal and contact number.

Registering for this facility enables you to receive redemption proceeds into any one of the registered bank accounts of your choice without having to provide for bank details and the supporting documentation at the time of redemption. The same form, used for registering additional bank mandates, has a section for deleting a bank account and investors should ensure that accounts not in use are deleted.

Default bank account: At the time of registering multiple bank accounts, investors have to specify any one bank account as a “Default” bank account. Dividend proceeds are processed into this default bank account only. Investors may specify any of bank accounts for the credit of redemption proceeds. If no account is specified in the redemption request, redemptions will be processed into this default bank account.

(Contributed by CAMS Viveka, an Investor Education Initiative from CAMS. The views expressed herein are general practices in the Mutual Fund industry and may vary on a case to case basis. Queries may be e-mailed to >mf@thehindu.co.in )

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