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If you use Internet banking, then the ease of investing in mutual funds (MFs) online just got easier. MF Utilities (MFU)—transaction platform started by the Association of Mutual Funds of India (Amfi)—has rolled out a facility through which you can invest across 25 fund houses (and counting) using a common account number, in a paperless way. Here’s how.

Once you contact your distributor and place a transaction order, say, to buy units of a certain scheme, your distributor will initiate the transaction on the MFU portal. She will key in the transaction details on the screen and initiate it. You will get an approval email and text message on your mobile phone. You need to approve the transaction. Once you do that, you will be transferred to your bank’s website to make the payment. The same procedure is followed for sell transactions as well, except, of course, no payments have to be made.

But what if you don’t use Internet banking? There is a way out. You can now register a one-time bank mandate. Called PayEezz, it allows you to register your bank account with your Common Account Number or CAN, which is your MFU account. Thereafter, every time you invest, you don’t need to issue cheques. You just need to quote your PayEezz Registration Number (PRN) in your form and money will get debited from that bank account. Your distributor can quote your PRN in the form (when she initiates the transaction online). You get the approval email and SMS, which you need to authorise for the transaction to get implemented. Once authorised, money is debited out of your bank account.

Added convenience

For distributors like Mumbai-based Viral Bhatt, this facility helps save time. “Earlier, I had to go to the Registrar and Transfer Agent’s (R&T agent) office to drop off the forms. But now I can initiate the transaction online and my client also makes the payment online. It’s completely paperless," he said. In the earlier process, too, Bhatt could have scanned his client’s documents (the application form and so on) and initiated the transaction after getting his clients’ signatures, but then he would still have had to courier the forms to the R&T agent. The physical copies still have to be sent—the process was part-online and part-offline.

“The Web link that the distributor sends to the client after initiating the transaction will expire after 24 hours. We have given this window to ensure that if investors are abroad, they get enough time to approve the transaction," said V. Ramesh, managing director and chief executive officer, MF Utilities India.

Starting line

For investments that go through MFU, you need to first open a CAN by filling in a 6-page form. Once an investor gets a CAN, she can then invest across all the MFs that MFU offers, through a single form.

PayEezz works with a one-time mandate (OTM), which a few fund houses have also launched. However, unlike an MF’s OTM, which works only for that particular fund house, PayEezz works across all fund houses that are present on the MFU platform.

According to Ramesh, investors can register as many PRNs as they want (PRN registration is a one-time exercise), but every time a distributor initiates a transaction, she needs to specify PRN of the account from where the money has to be debited.

Although MFU offers a way to invest in direct plans of fund houses, it has not yet opened the online and paperless investment facility for direct investors. If an investor wishes to invest in direct plans of fund houses, she will need to go to the R&T agent and submit the MFU-specified application form. She can go to any R&T agent and submit the MFU application form, irrespective of whether that agent serves the chosen fund house or not. “Online investment facility for investors who wish to invest through the direct mode, will come up eventually," said Ramesh.

He added that the MFU platform is gaining ground as almost 450 distributors have opened accounts with MFU.

After a long delay, MFU was launched in March 2015. So far, 10% of the transactions have happened in liquid funds, and about 60% in equity funds.

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