I had applied/ invested Rs. 17,000/- in SBI Magnum Funds Umbrella - Contra (Re-investment plan) as on 11-May-2000 and was also allotted in the same plan vide my original Folio no. xxxxx. Since I was sure that I will not be receiving any dividends until I decide to redeem, I never bothered to update my bank account details and/ or address with the SBI-MF (frankly speaking, I was too busy with my corporate job). I lost my job during the lockdown and then I decided to consolidate all my investments and/ or redeem some of them.
When I went to CAMS office in Indore in Feb.’21 to ask for the latest statement, I had a shock of my life to see that SBI-MF had actually issued me dividend payouts for all these years starting from 2003 onwards and since they obviously got bounced (because I never updated my address and had also closed my bank account which was registered at the time of application), all those dividends were deposited in some escrow account, called UDRS. All these unpaid dividends were automatically credited into my new ICICI Bank account as soon as I updated my KYC in March 2021 for the very first time after my original investment done about 21 years ago.
On following-up with CAMS and SBI-MF office via e-mails/ phone/ personal meetings, I came to know that sometime in 2002/ 2003, SBI-MF had changed their registrars from Datamatics to CAMS and also migrated their database from offline to Online. In the process due to some human-error, my investment was inadvertently switched from ‘Dividend Re-investment’ to ‘Dividend Payout’; and I never came to know about it as I never updated my address.
Now, since Feb’21, I have been running pillar to post - wrote several mails to SBI-MF, escalated the same to the extent possible, but SBI-MF kept on saying that as per their available records, the original investment was in ‘Dividend Payout’ plan. In August 2021, I lodged a complaint with SEBI (SCORES). But even there SEBI had closed my case three times in last 6 months giving any lame excuses and I have re-initiated or reopened my complain for the third time yesterday (5th Jan’22) on the SCORES portal. SBI-MF has now found out that out of the 18 Dividend payouts between Sep’2003 and March 2021, two got credited into my bank account – i.e., in 2007 and 2009. However I did not receive any of them as I closed my registered bank account with Canara Bank (in Viman Nagar, Pune) sometime in 2003/ 2004 and I have kept no records of the same. And since then I have got no relationship with Canara bank and they are unable to verify SBI-MF’s claims as they say, they are not bound to keep any records beyond 10 years. SBI-MF’s argument is that since the investor (me) did not object receiving the dividends for 2007 and 2009, the investment plan stands as ‘Dividend payout’ plan.
My arguments are following:
1) I never received any dividend in last 21 years – and that is as expected as I opted for Dividend re-investment plan.
2) How can only 2 odd dividends, that too somewhere in the middle of the tenure (i.e., in 2007 and 2009), can be credited into my bank account; while all previous, post and in between (i.e., 2008) got bounced?
3) Even if we agree for the time being that two of the dividends got credited into my bank account; who has asked SBI-MF to send/ credit those dividends? If they have done it, its their mistake.
4) If SBI-MF can produce evidence to prove that two of the dividends actually got credited into my bank account, I am ready to return the same alongwith all other dividends that got credited in my new bank account in Mar’21 (after I updated my KYC). But then the AMC should issue a corrected statement of account as per my original plan of ‘Dividend Re-investment’ right from day one.
I can provide you details about all my mail correspondences, complaints with SEBI/ SCORES, show my original MF certificate issued by SBI-MF on 17th May 2000 and any other evidence as would be required by you.
I request your guidance on next steps to fight my case against giants like SBI-MF and SEBI to get me justice.
Sorry, but the first question came to my mind was whether the application was filled up by you or by some agent and you simply put your signature on it. The mutual fund application form is generally a common one across all schemes with various options. Certain schemes offer compulsory dividend pay-out option while some offer compulsory re-investment of dividend. You have to check under which category your scheme falls. You have also to check the periodicity of the dividend you opted, i.e., monthly, quarterly, etc. Dividend is declared only when there is sufficient surplus available for distribution. So it is not that you will receive dividend every time, whether it is pay out or reinvestment. The relevant clause reads “Dividend, if / whenever declared…….”.

You have to get updated your passbooks to understand the exact position of dividend credits. Though the registrars got changed, it is the duty of SBI MF, the owners of the data, to provide statement from the beginning. In fact MFs generally mail the statement whenever any transaction takes place. Have you checked your mail, particularly the SPAM or BULK or some similar other folder of your mail account?

Unpaid dividend is parked separately after remaining unclaimed for three consecutive years. MFs have to follow extant guidelines issued by SEBI in this regard. Since you have already moved to SEBI – SCORES, let us hope that SEBI will suitably direct the MF. Also, please make it a habit to review and keep updated all your accounts and investments atleast once in a month without any excuse. Also note to share a copy of all your financial details to your spouse.
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