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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Investor Services

A mutual fund investor wants to change the bank account registered in his folio for receiving redemption proceeds. Which is the most appropriate step for the distributor to advise?

The investor should submit a change of bank mandate request to the AMC or its registrar with proof of the new account, such as a cancelled cheque or bank statement, and identity verification. Redeeming units or informing the bank is unnecessary.

  1. ATell the investor to inform the bank, which will update the AMC
  2. BSubmit a change of bank mandate request with proof such as a cancelled cheque or bank statement, along with a valid identity verificationCorrect
  3. CAsk the investor to redeem all units and reinvest in a new folio
  4. DSend an email to the AMC without any supporting document

Explanation

A change of bank mandate is processed by the AMC or its registrar on a written request with supporting proof of the new account, such as a cancelled cheque leaf, and verification of the investor's signature or identity. Redeeming and reinvesting is unnecessary and may trigger tax.

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