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MFs urge investors to de-link YES Bank account and scout for alternatives

Move aimed to avoid funds getting blocked in account post-redemption request

YES Bank | Mutual Funds

Jash Kriplani  |  Mumbai 

Mutual funds, MFs
Photo: Shutterstock

Fund houses have urged investors to look at other bank accounts for their investment mandates if their mutual fund (MF) investments are linked to

“We have asked investors to de-link from accounts as their funds could get blocked after redemption requests,” said the chief executive officer of a fund house.

On Thursday, the Reserve Bank of India (RBI) imposed a moratorium, capping withdrawal for account-holders at Rs 50,000. Among distribution platforms, Zerodha also urged investors to make the switch.

"We have cancelled all withdrawal requests made by clients to their accounts so that the money doesn’t get blocked. Please change, if your primary bank account is YES, to any other and withdraw the funds," Nithin Kamath, founder and chief executive officer of Zerodha said in a social media post to alert the investors.

"We are calling up our clients and telling them to immediately change the bank account mandates," said Bharat Bagla, an individual MF distributor.

Paytm Money stopped accepting fresh flows to YES Bank’s mutual fund schemes. People in the know said there is uncertainty over the fate of YES MF after SBI takes over the bank. SBI has its own separate fund house, along with a stake in UTI MF. Holding YES MF could breach Sebi’s cross-holding norms.

Currently, YES MF has three schemes running — YES Ultra Short Term Fund, Yes Liquid Scheme and YES Overnight Scheme.

First Published: Fri, March 06 2020. 13:05 IST