Why mutual fund ask for cancelled cheque while changing bank details

This is a normal practice and a standard guideline for changing bank details in mutual funds. This has been implemented so that your redemption and dividends are seamlessly credited in your designated bank account through electronic mode and there is no need to send any physical cheque to your address. Sending a physical cheque has many disadvantages, like courier cost, loss of cheque in transit and delay in credit.

We think, generally investors are happy with this practice and you must appreciate that this helps the investors! You should not have any issues with this and rather you should enjoy the benefits. Most of the companies issuing debentures/ bonds and fixed deposits have also migrated to this process to ensure better service to the investors. Hope you understand :) Thanks :))