Mar 17, 2008

Mutual Fund Identification number - MIN

MIN and bear it: Here's what you need to know

THE mutual fund identification number (MIN) seems like a nasty surprise for many investors going by the immediate implementation of its applicability. Here are  several practical elements that will come in play while an investor is looking to take the number.


The most important component of the entire number process is the requirement for an investor to have this identification number. Currently, a single investment in the various participating mutual funds equal to or more than Rs 50,000 requires a MIN. If a person wants to avoid using the MIN then he has to ensure that single investment should be less than Rs 50,000. For example, an investor wants to make two separate investments of Rs 30,000 each in a scheme within a period of one month. In this case, there is no requirement for MIN. If the investment is Rs 50,000 and Rs 10,000 then a MIN is required. Currently, MIN is required for new investments. Further, even dividend reinvestment will not be subject to the requirements of MIN. According to a financial planner, the problem is that if there is an existing systematic investment plan (SIP) or a systematic transfer plan (STP) and this is for a sum of Rs 50,000 or more, even though the instructions might have been given at an earlier date, it will be considered as a new investment and will require a MIN. Further, the limit of Rs 50,000 is the figure applicable today and this can be changed at any point of time, hence investors need to be careful.

Actual process:

As the actual process of applying for the MIN begins, the troubles also starts. The requirement for MIN does not exclude anybody. There are various holdings and folios where there are two holders or joint holders. In such a case, both the investors need to have a MIN even though the first holder who is also receiving all the benefits is doing the entire investment. The next is the requirement of a photograph to be submitted with the application. The photo has to be with a white background. If you were thinking of giving a single document and completing the entire process then this will not work because a minimum of two documents will be required. The first is a copy of the PAN card. But most investors will say that this has already been submitted to the fund once and also verified. That might be the case, but here another copy of the PAN card is needed. This will also qualify as the proof of identity because there is a photo on the PAN card copy. In addition, an address proof is also required. Now comes the tricky part for the submission of these documents and their copies. Several frequently asked questions issued by funds talk of allotment of MIN on the spot but as many investors will realise this is not the case and the investor will get their MIN after a few days. In the process, the investors have to ensure that their document verification is complete by taking along the original documents at the time of submission, which will be verified and returned. If you are not able to go or send someone personally with the original documents then these have to be certified, which means that they have to be attested or gazetted or notarised by the appropriate authorities. Most investors may find this document part very tricky to complete because several of them would not like to give their original documents to others while submitting the application form and hence would need to get them certified. There is one additional section in the form that has to be filled in which somewhat amounts to an invasion of privacy. The gross income of the individual is required to be given within various brackets that are mentioned on the form. In addition, the occupation and also whether the investors is a civil servant bureaucrat, current or former MP, MLA or MLC, politician or current or former head of state has to be mentioned.

Non compliance:

If the requirements are not complied with and the individual does not have a MIN then the mutual fund will cancel the original investment made and redeem the units less the applicable load and return the money to the investors. This will happen in both existing schemes as well as new fund offers. This can also happen if the MIN application of the investor is rejected and the number is not allotted when a high-value investment is made. So, for all investors who thought that they had completed the administrative process by submitting PAN copies some time earlier, there is more work to do.