a complaint from a reader. Really scary if u are a NRI…


Recently I wanted to redeem of my MF-DY SIP portfolio. When I had submitted request, HDFC MF asked me to submit bank statements as proof of verification that funds are drawn from my account. This was a bit shocker to me because all my investments are done through net banking of the same HDFC bank.

I live abroad and it was painful for me that I need to recoup bank statements from first SIP investments onwards. Being a privileged customer of the bank, I could download the bank statement of last 3 years and could furnish. As a result, my redemption amount got delayed by 3 days. I would have screwed up if I linked this payment to any urgent requirement such as admission fee or medical etc..

But then wondered, if SIP would have continued for 10 years, I would have found difficulty in getting or downloading the statement. The redemption could have gone into tailspin and complex web costing me high price.

Even while India is reeling under rupee depreciation and trying to attract flows from NRIs, let me reiterate that none of the equity investment rules for NRIs got simplified. On the top, they are harassed with arbitrary requirements.

I am really scared to put my investments in India on any of the asset class except FDs.

– See more at: http://www.subramoney.com/2013/11/where-is-the-indian-retail-equity-investor/#comments

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  1. Can’t the investor raise a complaint on SEBI website against MF asking for such arbitrary requirements at the time of redemption?

    I had an issue with a fund house in the past with regard to one of my FMP(closed-ended) getting automatically switched to an open-ended income fund without my consent or explicit request. After 2 frustrating days of trying to follow up with the fund house helpdesk folks, I simply went to SEBI website and raised the issue giving details of folio, fund house and issue. In 2 days MF folks were following up with me to ensure this issue was closed and acknowledged lapse and sent redemption proceeds immediately to my account

  2. Why is bank concerned about source of funds at the time of redemption? They should have made it sure when SIP got started…right?
    This is clear case of blackmailing…

  3. I find this post surprising. I had been an NRI for many years. I have invested across AMCs including HDFC. I periodically redeem specific investments /rebalance but I never faced this problem. In fact HDFC AMC’s customer service responses are better as compared to other AMCs.

  4. Every time SIP amount is made I receive an email from HDFC MF asking for FIRC ( details of account from where money went in to SIP).

    All most all financial institutions accept money very easily and they will come with rainbow colors when you want to withdraw money. For example, in ICICIdirect opening FD is few button clicks from web from any part of the world. But withdrawing needs physical bonds, address proof, physically signed request forms, cancelled cheques for account validation etc.

    I spoke to ICICI direct customer support at length and told them that only reason I opened FD ( little less interest compared some other paper based options) via them because everything is online, and questioned them how come they don’t process matured fd’s online ? “Sir, thats the process”. ( of course they would have mentioned in their long long terms and conditions, which seems to have every thing else in world except common sense , which is if you are accepting opening requests online, closing proceeds should also be online. Probably if FD companies give commission on closing also then next day it may become online 🙂 ). Finally it was clear to me “they do everything online when commissions are involved and once that is achieved, good luck, you are on your own.

    I have found that Mahindra fixed deposits are far superior in their service. They accept scanned copies of any certificates, signed requests etc and they do most of things electronically.

    But MF redemption till now have been easy through ICICI direct. Not sure how HDFC is going to handle SIP’s ..

    Subra Sir has mentioned many times.. its our money so our responsibility to read fine print..

  5. Subra si, this not only NRI problem.
    couple of days back i went to change my account number in IDFC MF (i bought it direct) and they were asking me all these details, first cheque number, and all. I told them i did my first installment in oct 2007 so pls i have no clue. 🙁

  6. Subra Sir, I have another experience with investments thru FundsIndia. I have invested in different fund houses thru them before direct plan. Now I did a redemption from HDFC MF thru FundsIndia then they where asking The AMC require the account statement (FIRC confirmation) for the purchase transaction.

    The problem is we are not doing the direct online transfer to the AMC the money goes to the broker and he does the rest of the job.
    But at the same I got the mail from HDFC the redemption is to my NRI account. But FundIndia was insisting me to send the statement otherwise HDFC will issue a cheque to my registered address and I did the same. But I got the confirmation from the AMC with another email saying it is direct transfer to my account.

    Also I did another redemption directly with AMC without using FundsIndia but invested thru them then there was no problem at all same AMC.


  7. This is very True of coming across all possible harrassment when we as an investor need the money.
    recently for my MF portfolio started in 2005, when i was needing redemption in my new bank account, they need cancelled check and passbook of my registered bank account which i closed many years back.
    first time i learnt that if any bank account is closed keep few cancelled cheques and passbook closure copies in Important Document file!

  8. Thank you Subra for posting my earlier comment as today’s post. I am sure expense ratio charged to customers covers some of the admin work as well. The fund house could clarify everything from the customers prior investment. Once the payment is accepted, I believe fund house should not impose any restrictions later especially during redemptions.

    The same HDFC-MF has not put this restrictions earlier couple of years ago. I am not sure why they chose to complicate this matter now. I suffered a loss of 50K investment and furthermore 2% expense ratio sucked from my investment. I do not blame for poor performance but harassing the customer whose portfolio under loss is like rubbing salt on the wound.

    Even during this crisis, direct equity investment rules are not eased for NRIs. They have to go through still PIS route which do not make any sense. I am not sure why direct equity investments for NRIs are not made as like Resident Indians.

    One more point. If we go through any bank site, it informs that funds in NRE account are repatriable. NRIs think that it is easy to convert INR into any FOREX from this NRE account for their kids educational needs abroad. Try doing that, Indian banks would make our life hell.

    Bottom line is I only invest where I can invest and liquidate through online without any human interface. These days SBI and HDFC banks are providing this facility for FDs. The investment merit and returns are secondary.

  9. I also have the same problem with HDFC MF & Franklin templeton. I started SIP’s in them online and they are asking for Foreign Inward Remittance Certificate (FIRC) for each and every SIP instllment . I also have SIP’s in DSPBR, IDFC, Sundaram but they are not asking it. It means every month we have to send our bank statement to HDFC MF. I represented to them many times but they keep on telling me everytime that it will be useful when redeeming. But why ? Are banks not supposed to give FIRC to the Mutual fund. Why only some fund houses are asking & others are not. I have redeemed funds from Sundaram without any hassle ( note that they are not asking FIRC)

  10. Dear all
    i am also facing same problem i had invested ABSL MF and now in redemption time asking me FIRC certificate they did not except bank statement asking from FIRC certificate and will be issue certificate

    and will be charge each transaction fee ,imagine so many transaction how possible to pay fee each transaction

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