From April 1, 2021 clients of eight banks which were merged with 5 totally different banks can’t use the cheque books, IFSC and different particulars of their outdated banks. The mergers can be of – Company Financial institution and Andhra Financial institution with Union Financial institution of India, Oriental Financial institution of Commerce and United Financial institution of India with Punjab Nationwide Financial institution, Syndicate Financial institution with Canara Financial institution, Allahabad Financial institution with Indian Financial institution and Dena Financial institution and Vijaya Financial institution with Financial institution of Baroda.
Whereas the account numbers of the prevailing clients of Company Financial institution, Andhra Financial institution, Oriental Financial institution of Commerce, United Financial institution of India, Syndicate Financial institution and Allahabad will stay the identical even after the merger, that of the shoppers of Dena Financial institution and Vijaya Financial institution will change together with different particulars.
So, what the shoppers of banks that bought merged with different banks have to do for lump sum investments?
Because the cheques of erstwhile banks can not be used, traders can’t use such cheques from April 1, 2021 for lump sum investments in any monetary product or for beginning a Systematic Funding Plan (SIP) in any of Mutual Fund (MF) schemes.
However will the mergers lead to discontinuation of present SIPs?
Sharing his expertise, Air Veteran Joginder Kaushik, who’s now working as a Mutual Fund Distributor (MFD) at Bhiwani, Haryana and has many Defence Personnel as his shoppers, mentioned, “SIPs of none of my shoppers have stopped after their switch as they bought their accounts transferred in the identical financial institution on the new place. The required particulars mechanically bought up to date on the AMC finish with none intimation from the shoppers.”
Such account transfers lead to continuation of the identical account quantity, however IFSC and different particulars get modified.
What would be the impact of change within the banks of the traders after the mergers?
Speaking on financial institution merger, Kaushik mentioned, “Even after the merger of State Financial institution of Patiala with State Financial institution of India (SBI), SIPs of none of my shoppers, who had accounts in State Financial institution of Patiala, stopped as account numbers stay the identical.”
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So, for the traders, whose account numbers stay the identical after the mergers, SIPs would proceed unaffected with none intervention.
However what in regards to the clients of Dena Financial institution and Vijaya Financial institution?
“They need to replace their financial institution mandate to make sure continuation of present SIPs,” mentioned Kaushik.
To replace the prevailing financial institution mandate or to register a brand new mandate, such traders have to contact both the MFDs or Monetary Advisors they’re related to or to the respective Asset Administration Corporations (AMCs) or their Register and Switch Brokers (RTAs).