Equity mutual fund payment redemption to take less days from Feb 1 — Here's how

Indian equity markets have move to T+1 settlement cycle for all stocks, shortening the settlement cycle by a day and making availability of funds a day sooner than at present. To pass on this benefit to mutual fund investors, it has been decided all Asset Management Companies (AMCs) will move to T+2 redemption payment cycle for equity schemes, and implement this uniformly with effect from February 1, 2023.

This includes all transactions received before cut off timing on February 1, 2023 and processed at closing NAV for February 1 2023) after allowing a couple of days for the settlement cycle /process to stabilise. This means that equity mutual funds in India will be settled within two days now instead of previous T+3 settlement cycle where it used to take three days for equity mutual fund redemption settlement.

A Balasubramanian, MD & CEO Aditya Birla Mutual Fund and Chairman, AMFI commented that “T+1 settlement cycle for Indian equity markets is a global first. As an industry, we want to pass on the benefit to our mutual fund investors and hence we are proactively adopting a T+2 redemption payment cycle for equity funds."