Last month, IDFC First Bank Long-Term Infrastructure Bonds matured,. These bonds were issued in 10 years ago in 2011. And there is a fair chance that the bank accounts of some of the bond holders would have changed in the interim. Though the bank has attempted sending physical redemption warrants to the address of the investors, there is a possibility that the investor too would have moved residences. To facilitate quick credit of money to investors' bank accounts, the bank has offered to update the bank account details of the investors.
Such investors can go to the website of the bank or the registrar and transfer agent (RTA) K-Fin, in this case and update their bank account details after validating their credentials. The investors can also write an email to the RTA with scan copies of supporting document - PAN and cheque along with details of the bond holder to get the bank account updated.
You may be holding some such bond investments and may now be wondering how to update the bank details for the same. Here is how you can do it.
How do I change my bank account if I hold NCDs in demat?
Investors hold bonds either in a physical form or a demat account. Many new NCD issuances are done only in demat form. Holding bonds in demat account is better as it facilitates easy storage, changes in records and convenient transfer. “If you hold bonds in demat form, you have to write to your depository participant in the prescribed format,” says Ajay Kejriwal, President, Choice Broking.
Get in touch with your depository participant with a duly signed form and a cancelled cheque, giving the name of the investor and other details of the bank account. Make sure that the holding pattern of your new bank account is exactly the same as your demat account. Also, your demat account is linked to just one bank account. In simple words, whatever money (interests, dividends, redemptions) that you get across all the securities you hold in this demat account – equity shares, bonds, mutual funds and so on – flows to this bank account. So, if you change your bank account that is linked to your demat account, then payouts from all your dematerialised investments will land up in this new bank account.
What if I hold physical bonds?
It gets a bit tricky. You need to get in touch with the Register and Transfer agent (RTA) of each bond issuer. The company that has issued its bonds would, typically, mention this detail in its website.
However, there are cases where a particular series (or tranche) of bonds is managed by one RTA and other series is managed by another RTA. If you know the ISIN- international securities identification number- then you can figure out the correct RTA and the office address of RTA.
The RTA’s website has forms for updating the bank accounts or the same can be requested by email. You have to then fill up the physical form and sign it. Attach a cancelled cheque (make sure the investors’ names are mentioned on the cheque leaf) and a self-attested copy of PAN (permanent account number), and send it to the RTA by registered post or courier. You have to do this for as many bonds as you have.
Once your signatures and forms are validated, your new bank account gets tagged to your bonds. Usually, this takes about seven working days. A letter specifying the change in bank details is also sent to the investor.
You should update your bank account details whenever necessary, to avoid missing on any cashflow from the bonds you held.