Change of bank details

Dividends, interest and redemption money on physical holdings are paid into the bank account recorded against the folio. If that account is closed or wrong, the payment fails — and repeated failures are how holdings drift towards the IEPF.

So keeping the bank mandate current is a core investor service. It is also a request fraudsters would love to make on somebody else's folio, which is why the registrar insists on the holder's own signature and proof that the new account is really his.

For dematerialised shares, bank details sit with the DP and reach the registrar in the beneficial owner download. This request is for physical holdings.

The core rule (Chapter 13.2.2). The request must be signed by the first named security holder as per the specimen signature recorded with the R&T agent, and supported by an original unsigned cancelled cheque for the new account, bearing the name of the security holder. After verifying the signature the RTA updates the records and intimates the holder. On a case-to-case basis it may ask for additional proof of identity.

KYC and the common form. Form ISR-1 is SEBI's common form for registering or updating PAN and KYC details — including bank details — for physical holdings in listed companies. From 1 January 2022, no service request or complaint is processed until PAN, KYC and nomination details are received.

Signature problems. A minor mismatch: the RTA tells the holder and allows 15 days for objections; with none, it processes the request, and the processing timeline starts after those 15 days. A major mismatch or no signature on record: the holder furnishes an original cancelled cheque with his name printed, or a self-attested bank passbook or statement, plus banker's attestation of the signature in the SEBI format.

What RTAs may not demand. Supporting documents are self-attested. RTAs should not insist on affidavits, attestation or notarisation, nor on indemnity — except for transmission and duplicate securities.

Modes and timeline. Hard copies by post, e-signed electronic copies, or in-person verification. Processing a change in bank account details: 15 days. Revalidation of dividend or interest instruments: 15 days.

Why it matters downstream. Where bank details are not available, RTAs must make efforts to obtain them and make the payment. Instruments unpaid beyond their validity are cancelled and the money credited back to the issuer; paid and unpaid details are reconciled quarterly until transfer to the IEPF, and those files kept eight years.

Illustrative figures. A shareholder holds 1,500 physical shares. Her old bank account was closed in a merger. The company has paid a dividend of Rs 12 per share in each of the last three years, and every credit has bounced.

Unpaid dividend = 1,500 × Rs 12 × 3 years = Rs 54,000

She sends a request for change of bank details on Form ISR-1, signed as first holder, with an original cancelled cheque of her new account printed with her name.

Her signature has changed over twenty years — a minor mismatch. The RTA writes to her and waits 15 days for any objection. None comes. The 15-day processing clock then starts, and the new account is recorded within it.

She also asks for the three unpaid dividends. The RTA processes revalidation / re-issue of the remittance and sends the request file to the bank — within 15 days — and Rs 54,000 is credited to her new account.

Had the RTA asked her for a notarised affidavit or an indemnity bond for this change, it would have been asking for more than SEBI permits.

Chapter 13.2.2 (Change in Bank Details) for the core documents; Chapter 13.2 and Annexure 13.4 for ISR-1 and the January 2022 KYC rule; the revised norms on signature mismatch and prohibited documents; the Chapter 13.6 timeline table; and Chapter 6.4.1 for the dividend-payment provisions of SEBI's RTA guidelines. Expect document questions (cancelled cheque bearing the name), the 15-day timeline, and which requests may still require an indemnity.

• An original cancelled cheque bearing the holder's name is the supporting document; section 13.2.2 describes it as unsigned.
• Signed by the first named holder as per the recorded specimen signature.
• 15 days to process a change in bank details — the same as address, e-mail and mobile, while name, signature and nomination changes get 30 days.
• No affidavits, notarisation or indemnity may be insisted on; indemnity is reserved for transmission and duplicate securities.
• A minor signature mismatch buys a 15-day objection window before the processing clock starts; a major one needs banker's attestation.
• For demat holdings, change bank details with the DP, not the RTA.