How can you locate your mutual fund portfolio if you’ve lost track

Question: Before I came to the Gulf I had invested a part of my savings in units of mutual funds. Unfortunately I have not been able to trace the investments due to my relocation. Is there any possibility of retrieving my investments through any platform?

ANSWER: Currently there is no certainty of locating the investments especially where investments become dormant and remain unclaimed for different reasons. Therefore, the market regulator, the Securities & Exchange Board of India, is proposing to set up a portal to be called Mutual Fund Investment Tracing & Retrieval Assistant (MITRA). This will be set up by CAMS and KFintech, which are two leading registrar and transfer agents. Once MITRA is set up, investors would be able to locate their mutual fund investments, ensure current KYC compliance, and implement protective measures against fraudulent withdrawals. It has been found that mutual fund investors lose track of their investments, particularly those which were made in the past in physical form. These mutual fund accounts may not appear in the unit holder’s consolidated account statement due to missing e-mail id or a valid address. Further, heirs of deceased investors may find it difficult to claim the units. It is expected that by the next financial year, MITRA would be able to provide investors with a searchable data base of inactive and/or unclaimed mutual fund portfolios. The registrar and transfer agents would take responsibility for regulatory compliance as well as system and cyber security audits.

Question: As per press reports, some finance companies have overstretched themselves in giving loans. This has weakened their solvency ratio. Are steps being taken to correct the situation? Is it affecting commercial banks as well?

ANSWER: In its Financial Stability Report, the Reserve Bank of India has raised a red flag on the high delinquency levels of fintech lenders especially in the commercial vehicles and two-wheelers financing space. The vulnerability on the asset quality front has been detected due to excessive loan-to-value ratios in the used car segment. As a result the regulator has issued orders to a few finance companies asking them to suspend their operations where more than one loan has been granted to the same borrower who has defaulted. The Reserve Bank has also frowned upon the practice of giving top-up loans for repairs, tyre replacement as well as for consumption purposes. Therefore, fintech companies are under a tight watch and immediate action is taken by the RBI to keep delinquent companies in check. However, the good news is that the gross non-performing asset ratio of public sector banks has dropped from 14.6 per cent in March 2018 to 3.1 per cent in September 2024. This improvement and strengthening of banks is on account of the implementation of the four R’s strategy which is recognising NPAs at an early date, resolution and recovery, recapitalisation and reforms in the financial system. The banks have also strengthened their capital adequacy requirement as a result of RBI’s constant asset quality reviews. Stricter provisioning for stressed loans and enhanced recovery efforts have played key roles in lowering the NPAs. This has had a favourable impact on the net profit of these banks which has increased to Rs.1.4 trillion for the financial year 2023-24. As a result of these efforts, the financial health of public sector banks has improved dramatically and there has been a higher payout of dividends reflecting an increase in shareholder value.

The writer is a practising lawyer, specialising in corporate and fiscal laws of India.