What is SIP ? & Why it fails :
SIP (Systematic Investment Plan) allows investors to invest a fixed amount at regular intervals in a mutual fund scheme.
For a SIP instalment to be successfully processed, certain conditions such as sufficient bank balance, an active mandate, and correct payment details must be met.
A SIP may fail when the scheduled instalment cannot be processed due to an issue with the investor's bank account, mandate, or transaction setup.
Understanding the common reasons for SIP failures can help identify the issue quickly and take the necessary corrective action.
Rejection / Failure Reason | Cause | Action to be Taken |
|---|---|---|
| Insufficient Funds | Required SIP amount was not available in the client's bank account on the auto-debit date. | Ask the client to check with the bank using the UMRN to confirm the reason for the failed debit and ensure sufficient balance is maintained for future installments. |
| Payment Not Initiated | The bank/payment system did not initiate the SIP debit. | Ask the client to check with the bank using the UMRN and confirm why the payment was not initiated. |
| Mandate Revoked | The registered mandate has been revoked/cancelled by the client or bank. | Create a fresh mandate and link the new mandate to the SIP. |
| Mandate Not Approved / Active | Mandate is pending, rejected, inactive, or not approved. | Check the mandate status. If the mandate is revoked, create a fresh mandate and link it to the SIP. |
| Mandate Limit Exceeded | SIP amount exceeds the registered mandate limit. | Check the mandate limit and create/modify the mandate with a sufficient limit, as applicable. |
| Mandate Expired | Mandate validity has ended. | Create a fresh mandate and link it to the SIP. |
| Debit Failed | Bank was unable to debit the SIP amount from the registered account. | Ask the client to check with the bank using the UMRN for the exact rejection reason. |
| Bank Account Closed / Frozen | Linked bank account is closed, blocked, or frozen. | Ask the client to update a valid/active bank account and create a fresh mandate, if required. |
| Invalid Bank Details | Bank account/IFSC details are incorrect or invalid. | Update the correct bank details and complete the required verification/mandate process. |
| Technical / Bank Error | Temporary technical issue at the bank/payment gateway. | Ask the client to check with the bank using the UMRN and retry the payment/mandate process if required. |
| SIP Cancelled | SIP was cancelled before the installment was processed. | If the client wants to continue the SIP, register a fresh SIP with a valid mandate. |
| Repeated SIP Failures | SIP installments have failed consecutively. | Check the reason for the failures and ensure the bank account and mandate are active. If the mandate is revoked, create a fresh mandate. |