Invested in mutual funds? Do this to avoid problems while redemption
If you have invested in mutual funds, then you must know about this mandatory direction by the Association of Mutual Funds of India (AMFI). AMFI has now made it mandatory for the investors to update their Permanent Account Number (PAN) information in their mutual funds portfolios in order to have a hassel free redemption of their investments. The decision is followed by the recent inspection done by the Securities and Exchange Board of India (Sebi), wherein it was found that mutual funds and registrar and transfer agents had processed redemption requests even for folios where PAN details were not available.
As per the guidelines issued, the mutual fund investors are always required to provide PAN details at the time of completing the know your customer (KYC) formalities to invest in mutual funds. However, some investors are exempted from providing PAN details. The investors who invest up to Rs 50,000 per year per mutual fund are not required to update PAN details, as they can provide other approved identity proofs too.
Meanwhile, investors who are required to update their PAN can do this either online on the website of the respective mutual fund or physically submit the PAN and KYC updation form along with the updated PAN copy to the mutual fund’s office. The process needs to be followed for each mutual fund investment.
Another way is to update KYC and PAN details using PAN/KYC change request form. The investor can use this form to update the details with the KYC Registration Agency (KRA) such as Cams Investor Services Pvt. Ltd and Karvy Data Management Services Ltd. After receiving the PAN/KYC details from the KRAs, will update the information across all mutual funds in which the investor has folios.
In case of no updation of PAN details in the account, the financial and non-financial transactions, including redemptions, are likely to get rejected. Investors who need to redeem before the updation of PAN details should provide the same at the time of redemption along with a copy of PAN card.
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