Mutual fund investors have been flummoxed by the recent 1 rupee credits to their bank accounts by Computer Age Management Services (CAMS). Some might wonder if it’s some kind of fraud or security risk. However the explanation to this is a lot more benign.
CAMS is a Registrar and Transfer Agent for mutual funds. It credits ₹1 to verify the bank account registered with the mutual fund folio. The return file that is generated by the credit gives CAMS the name of the account holder as per the bank account. If there is a mismatch between the two, CAMS looks at the name on the KYC (Know your Customer) document to decide which name to use. This process also weeds out mistakes in the account number since in such cases the credit bounces back.
If you have received ₹1 from CAMS, don’t panic. It’s just a verification process.
