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

An investor wants to receive redemption proceeds quickly and securely. Under SEBI norms, which mode of payment of redemption proceeds is preferred by mutual funds?

Redemption proceeds are preferably paid by direct credit to the investor's registered bank account through electronic modes such as NEFT, RTGS or direct credit. This is faster, traceable and safer than cash, bearer cheques or payments routed through a distributor.

  1. ACash payment at the AMC branch
  2. BDirect credit to the investor's bank account through electronic modes such as NEFT, RTGS or direct creditCorrect
  3. CDemand draft sent only by post
  4. DBearer cheque handed to the distributor

Explanation

Mutual funds are encouraged to pay redemption proceeds through electronic modes directly into the investor's bank account registered in the folio. Cash and bearer instruments handed to distributors are not appropriate because of security and KYC concerns, and the other options are not the preferred route.

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