Do you invest in mutual funds via Yes Bank? Here are your options

Yes Bank account holders are having a tough time with RBI moratorium in place, which has restricted online banking transactions. Initially not only withdrawals but also deposits to the account were restricted. However, things have improved with people now allowed to transfer money to their Yes Bank accounts to meet obligations such as loan EMIs or credit card payments. However, clearing transactions such as payment to mutual funds are still blocked. What are your options if your payment towards mutual funds - either through SIP or lumpsum -is due in next few days or you have already missed the deadline? Here is how to deal with MF investment if you are a Yes Bank account holder:

What to do if planning to invest online?

Many account holders willing to invest in MFs online are unable to do so due to the restriction. "As per the moratorium on Yes Bank, the limit of Rs 50,000 is applicable for all kinds of transactions which include savings, investments, and withdrawals. Investors who wish to set up online SIP in Mutual Funds also cannot do so with their Yes bank account online," says Harsh Jain, Co-founder and COO, Groww. So, if you are planning to invest a lumpsum which is within Rs 50,000 withdrawal limit, you can very well transfer money online and make investment. However, it would be better to do so only if you have an alternate bank account with adequate funds to manage your personal and household expenses at least for a month or more.

If you are planning to set up an SIP, you will have to go for another bank account. Making online investment in mutual fund through another bank account will not be difficult if you are an existing investor with registered KYC. "If they are already having a folio with the Asset Management company, they may change the bank mandate accordingly," says Vinit Pagaria, Head of Research & Analytics, StockEdge. If you are a new investor, you will need to get your KYC done, which may delay your investment typically by a week or 10 days.

However, if you are not in hurry and can wait a bit for your new investment, you may be able to do so through your Yes Bank account also. "As per Yes Bank administrator Prashant Kumar, the moratorium on the bank is likely to be lifted very soon and the bank would sell down part of its corporate loan portfolio and focus more on retail banking going forward," adds Pagaria.

What to do if you have already written the cheque?

Many investors still prefer investing through cheques. Some would have already written the cheques or may have been planning to do so. "If the cheque has not been cleared, the investor may make additional purchase through other bank. If the units have already been allotted and the cheque has been cleared, no immediate action is necessary," says Pagaria of StockEdge.

In case your cheque has not been cleared or presented, you need to replace it through cheques from a different bank account. If your SIP is running through cheques, you need to act now. "SIPs through Yes bank cheques need to be stopped. Customers can issue cheques from other accounts basis availability of funds," says Jain of Groww.

What if existing standing instruction is due in few days?

There are many investors with existing standing instruction through which their SIPs get deducted each month. What are their options? All clearing activities except loan EMIs and Credit Card payments have been stopped. "The onus for making payments lies with the customers. As of now, only inward remittance has been allowed, which means customers are allowed to make payments through IMPS and NEFT for YES Bank credit card dues and other bank loan obligations," says Jain of Groww. Till the time restrictions are not relaxed your next payment will not be cleared if it falls within the moratorium period. "The investors should change the ECS mandate at the earliest," suggests Pagaria. For this you will have to get in touch with the intermediary which can be an online platform or offline players such as CAMS and Karvy. You may also get in touch with the mutual fund house directly.

If you had used an online platform to invest and set up standing instruction or ECS debit on your Yes Bank account, you may use change it easily. "For the online method, they can cancel the SIP linked with the YES bank, add another primary bank and start a fresh SIP, giving the mandate to the new bank. One way is to reach out to the respective Fund House and inform them of the change immediately," says Jain of Groww.

What if you wish to liquidate your investment?

There could be many investors looking to liquidate their investment either partially or fully. "Investors may consider changing the bank mandate if they intend to redeem the units in the near future. Before redeeming any units, the investors must ensure that they change the bank mandate else all the proceeds will be credited to the Yes Bank account, which they would not be able to utilise immediately. Once the bank mandate is changed, they can proceed with the redemption," says Pagaria. Many fund houses have already stopped processing any liquidation request from Yes Bank investors unless they have changed their account with the MF house. However you should not take chance and you must verify the change of your bank account for crediting proceeds of your MF investment before making any redemption request.

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