NPCI upgraded its automated payment system on January 31 but problems with implementation resulted in investors not receiving the units they purchased on time, said people aware of the matter. Investors are worried this means they’ve missed out on the post-budget surge in stocks.
Mutual fund industry officials said investors, who bought units through online platforms or digital gateways, have complained that money has been deducted from accounts but units have been received with a delay or not at all.
What has aggravated the problem are new Securities and Exchange Board of India (Sebi) rules. These require that investors’ money should reach mutual funds before units are allotted against buy orders of over ₹2 lakh. At least 500,000-700,000 transactions could have been hit, according to unofficial estimates. This could not be independently verified.
An NPCI spokesperson acknowledged there had been glitches but said that these had been resolved. “We upgraded the NACH (National Automated Clearing House) system Jan 31, and we faced some issues (some delays) in the next one or two days in which all the issues were ironed out,” the person said in an email.
‘Investors Seeking Compensation’
“Last few days, we have seen a smooth processing on our NACH system,” the person said.
An NACH mandate automatically deducts money from investors’ bank accounts and transfers it to the chosen mutual fund scheme. Monthly payments are deducted based on one-time consent or standing instructions. These include equated monthly installments (EMIs), mutual fund systematic investment plans (SIPs) and insurance premiums.Mutual fund executives said the problems didn’t appear to have been sorted out in relation to several transactions as of Monday night. Disgruntled investors are seeking compensation from fund houses for not getting unit allotments on time, said the chief executive officer of a mutual fund.
“Unless the fund receives the money, it’s not possible for us to allot the units,” the CEO said.
An executive at a domestic payment gateway firm said most mutual funds did not stop accepting payments either, clogging the system further.
