How-to bank mandate MF folio NACH

How to update bank mandate on mutual fund folio

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The bank mandate registered on a mutual fund folio controls two flows: redemption proceeds (where redemption cash credits to) and SIP debits (where SIP installments are pulled from). Updating the bank is a folio-level change, not a KRA-level change, and the procedure varies slightly per AMC and platform.

Conflict-of-interest disclosure. This guide is published by WebNotes Editorial Team for informational purposes. WebNotes has no commercial relationship with any AMC, RTA, platform, or bank. No affiliate commission is earned from bank updates.

Step-by-step procedure

See the procedure infobox above.

KRA vs AMC level

KYC at the KRA is name, PAN, address, mobile, email, and identity proof. Bank account is not part of the KRA KYC record (this differs from broking accounts, where bank is part of the broker KYC). Bank is registered at the AMC folio level. So bank updates always go to the AMC / RTA, not the KRA.

Multi-bank registration

AMFI’s Best Practice Guidelines allow up to 5 bank accounts per folio. This enables you to:

  • Receive SIP from one bank and redemption to another.
  • Set up backup bank for SIP if primary fails.
  • Receive lump-sum redemption to a different bank from regular SIP debit bank.

To use multi-bank, register all 5 at the folio and mark one as default for redemption.

10-day cooling period

Per AMFI guidelines, a redemption requested within 10 days of registering a new bank account credits to the previously registered default bank, not the new one. This is an anti-fraud control: a fraudster who hijacks a folio cannot immediately redirect redemption proceeds.

Plan large redemptions accordingly.

SIP NACH re-mandate

NACH mandates are signed authorisations from the bank to the AMC. The existing NACH mandate references the old bank’s IFSC and account. To shift SIP debits:

  1. Submit a new NACH mandate for the new bank (eMandate or physical).
  2. The AMC links the SIP to the new mandate.
  3. The old mandate is cancelled.

The transition can have 1-2 SIP installments under the old bank during processing.

See also

External references

References

  1. SEBI (Mutual Funds) Regulations, 1996.
  2. AMFI Best Practice Guidelines on bank mandate and multi-bank registration.
  3. NPCI NACH 2.0 operational guidelines.
  4. SEBI Master Circular for KYC dated 12 October 2023.

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The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

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WebNotes is independent. No relationship with any broker, registrar or bank named in this article.