Computer Age Management Services (CAMS) has imposed a limit of ₹10 lakh per month on withdrawals from its myCAMS online platform. The limit applies to multiple PAN numbers as well, if they are linked to a common email address. The company cited a ‘risk management framework’ deployed by it as the reason for the limit. The limit only applies to withdrawals from the MyCAMS portal and not through other modes. For example, withdrawal through competing platforms like Mutual Fund Utilities (MFU) or BSE Star MF Platform or directly through mutual fund websites would not be affected, even for funds where CAMS is the registrar and transfer agent (RTA).
“Almost 99% of the redemption transactions on myCAMS will go through basis past trends and about 1% are likely to have to utilize an additional mode,” the company stated in its defence, in an email to Mint. A senior executive at one of India’s largest mutual fund transaction platforms who declined to be named said that this move possibly indicates that the company is not confident of the robustness of its online systems. Sandeep Parekh, Partner at Finsec Law Advisors, however, played down concerns about the move. “I don’t see an issue with it. They are only limiting their liability. The service agreement between them and the users would most likely give them the authority to impose this limit,” he said.
The CAMS move comes in the wake of a ₹60 lakh fraud on mutual funds held by the owner of Avon Cycles.
In that case, the fraudster opened a fake bank account in the owner’s name and redeemed mutual funds to that account. Unlike other vehicles like NPS or insurance funds, open-ended mutual funds have no lock-in and can be redeemed at any time. It is unclear if the redemptions, in that case, were made through the MyCAMS platform.
Mutual Fund investors should be careful about their personal details as these can be misused. They should immediately contact the RTA concerned (typically CAMS or Karvy) if they receive any communication of change of details in their mutual fund holdings such as change of email address, bank account or phone number. With regard to withdrawals, however, mutual fund investors can withdraw their money through alternative means such as submitting paper-based withdrawal forms or using platforms like Mutual Fund Utilities, BSE Star MF or the websites of mutual funds.