When you redeem a mutual fund, the AMC (Asset Management Company) processes your order and transfers the amount to ICCL (Indian Clearing Corporation Limited). ICCL then transfers the amount to your primary bank account as per the settlement cycle.
If the payout to your primary bank account fails due to bank issues, ICCL will attempt the payout again on T+2 working day to your secondary bank account, if one exists.
What to do when your redemption payout is rejected
If the payout fails, you will receive an email with the rejection reason. You need to update your primary bank account with Zerodha on the same day so that the re-attempt is processed automatically after 2 days to the updated bank account.
As per SEBI regulations (WEB), ICCL cannot hold redemption amounts for more than 4 working days after the refund date. If you delay updating your bank account or the re-attempt fails, the amount will be refunded to the AMC.
In this case, you need to:
- Update your bank details with Zerodha.
- Contact the AMC with your updated CMR (Client Master Report) copy to claim the pending amount.
- The AMC will process the payout to your updated bank account after validating your CMR copy and bank proof.
Zerodha will also notify the AMC about the payout failure to help prioritise your payout.