In order to change the bank account details of a folio with any Mutual Fund company, the standard model is to submit a Bank Account Change Mandate form. This is given along with a cancelled cheque leaf of the bank account.
This is required due to two main reasons, both for safety:
- To ensure that the Mutual Fund folio is mapped to your account only. Government’s Anti Money Laundering rules stipulate that funds for a folio should come from the investors account only.
- Any withdrawals from the mutual fund folio should be credited to your account only and not to somebody else. Someone should not be able to fraudulently change the bank account and then do a withdrawal on your behalf. Some mutual fund apps (such as jama.co.in) ensure that withdrawals also have an additional approval by SMS or secure email link. The app is also protected by another secure PIN so that anyone having physical access to your phone does not place withdrawals without your knowledge.
