That changed in May 2025, when CAMS (Computer Age Management Services) and KFin Technologies — the two registrar and transfer agents (RTAs) that handle all MF back-end operations — launched a fully online facility that lets investors transfer MF units, including modifying ownership details seamlessly.
In November 2024, CAMS and KFin Technologies launched an online facility enabling the transfer of mutual fund units, but only for specific situations such as after the death of the investor. However, from May 2025, the scope of this facility was extended. Any person can now transfer their MF units to any other person (related or not), as long as certain conditions are met.
Besides transfer, adding or deleting a joint holder was also made seamless. “Adding or deleting joint holders changes the ownership pattern and is, therefore, deemed as transfer,” said E.S. Varadarajan, chief process and risk officer, CAMS. A folio can have up to three holders in total.
This shift follows a directive from the Securities and Exchange Board of India (Sebi) and Association of Mutual Funds in India’s (AMFI) best-practice guidelines, marking a major step in digitalizing mutual fund transactions.
Why this matters
This online facility enables investors holding mutual fund units in non-demat or statement of account (SOA) mode to transfer their units seamlessly under various circumstances, such as gifting them to a family member or friend, transferring to legal heirs as a nominee after the investor’s death, or adding or removing a joint holder.
Units of all MF schemes, except for solutions-oriented ones, such as children’s schemes and retirement schemes, can be transferred.
Notably, transfers in the case of MF units held in a demat account with a broker have always been transferable; however, they represent a smaller share of the overall investor base.
What makes this online MF transfer interesting? Prior to this facility, such transfers were not permitted at all, not even via physical submissions.
Unlike every other transaction in the MF industry, which can be done either only physically or both physically and online, transfer of MFs is something that is allowed only online – via websites/apps of CAMS, KFin Technologies, fund houses and MFCentral (a platform backed by the first two).
To prevent misuse, the transferred units are not allowed to be redeemed (sold) for 10 days after the transfer.
Mint spoke with a few mutual fund distributors (MFD) who have used this facility to understand how well it works and if they experienced any problems. We also tested the facility ourselves to add a joint holder to an existing MF folio, and found the process simple and straightforward.
How it works
The biggest USP of this transfer facility is that it’s completely online. Transfers can take up to two working days to take effect.
Herat Gandhi, head of customer service at Prudent Corporate Advisory Services, a leading MFD, tested the facility by adding his wife as a joint holder and transferring a few units to her. He said the process was “quick and convenient”.
Ravi Nagrani, a Pune-based MFD and co-founder of SBR Prosperity Compass LLP, used the facility to transfer MF units from a resident Indian father to his non-resident Indian son. Nagrani found the process smooth and the transfer was completed within a day.
“In 2024, before this online facility, the father had to sell his mutual fund units and then transfer the money to his son after paying capital gains tax — even though the son didn’t immediately need the funds. The idea was simply to pass on the investments to his son for the future, but this option wasn’t available earlier,” said Nagrani.
Note that transfers from a resident Indian to a non-resident Indian, and vice versa, are allowed but with certain conditions
- Those with an NRI-NRO (non-resident ordinary) account can do both, send and receive units
- Those with an NRI-NRE (non-resident external) account can make a transfer but cannot receive units. This is to ensure compliance with FEMA (Foreign Exchange Management Act) regulations.
Some teething issues remain. Nagrani recalled a failed transfer attempt earlier this year when making a transfer between two siblings. “The system just wouldn’t go through for some reason — it kept getting stuck midway,” he said.
Coimbatore-based MFD Vijay Venkatasubramanian saw his transfer times drop from five days in May to just one day in November. “The interface has become better and faster with time,” he said.
Adding a joint holder
When adding a joint holder, keep in mind that a nominee cannot be made a joint holder. Let’s assume your spouse is the nominee for your MF investments. If you wish to add him/her as a joint holder, you must first follow the process to update your nominee(s). That is, either choose another nominee or opt out of nomination.
This can be done online on CAMS and KFin Technologies (for the respective fund houses serviced by them) by providing some basic details such as PAN, mobile number, email ID etc. The nominee updation is based on OTP verification and happens instantly.
You can then proceed to add your spouse as a joint holder. That too gets completed as soon as you submit all details.
While you can opt out of nomination, it’s best not to do that. In the absence of a nominee, transmission of investments to the next of kin after an investor’s demise can get very complicated.
Updating your nomination details online is a very convenient process. In fact, if you have the same set of nominees across several folios, then while initiating any change (if it’s the same change), you can select multiple folios across multiple fund houses both on CAMS and KFin Tech once you navigate to the nominee updation page. For adding/deleting a joint holder, you can do it only folio by folio. The process, while straightforward, can become time-consuming.
Verification and prerequisites
Venkatasubramanian highlighted a glitch related to the penny-drop verification. After adding the transferee’s bank account details, ₹1 needs to be credited to the bank account to verify its ownership.
“Sometimes the penny-drop does not happen on the KFin Technologies facility. On CAMS, if it fails, you have the option of uploading a cancelled cheque leaf or an account statement to verify the bank details,” he added.
Meanwhile, before a transfer, both the transferor (transferring units) and the transferee (receiving units) must ensure that their know your customer or KYC status is ‘KYC Validated’.
You can check your KYC status on the websites of one of the KRAs (KYC Registration Agency). Begin by checking with CVL KYC KRA, which is the relevant agency for a majority of investors, or with NDML KRA, CAMS KRA or Karvy KRA.
If needed, you can redo your KYC online or by submitting a physical form to one of the fund houses. The updated KYC gets reflected in all your MFs across all fund houses.
If you are a non-resident (NRI) investor, you must have a ‘KYC Registered’ status. That is, your KYC must be based on documents such as foreign and Indian address proof, passport and PAN.
Apart from this, the person receiving MF units must have a folio with the relevant fund house. For example, if the units of an ICICI MF scheme are being transferred, then the recipient must have a folio with ICICI MF. If not, then a new folio must be created.
You can transfer units from multiple MF schemes in a folio, all at once.
“When this facility was launched initially, if the client did not have a folio, we would have to go to the AMC website to create one. But now, there is an option to create a prospect folio (zero balance folio) with both CAMS and KFin Technologies for the transferee to receive the units,” said Venkatasubramanian. Another MFD we spoke with made a similar comment.
Despite minor glitches, the online transfer facility marks an important step in making joint ownership of mutual funds as flexible as bank accounts.