BSE denies technical glitch as investors lost money in mutual fund investments on June 4

On June 4, as the benchmark Nifty 50 index plummeted nearly 6 percent, investors found themselves grappling with losses totaling around Rs 31 lakh crore on the stock markets. This significant downturn marked the Indian stock markets' most substantial fall in four years, coinciding with the Bharatiya Janata Party (BJP) receiving a smaller mandate in the 2024 elections compared to exit poll estimates.

Amid this market turmoil, reports emerged suggesting that many mutual fund investors, aiming to capitalise on election result day, inadvertently incurred losses due to delayed orders. Various publications indicated a possible glitch within the mutual fund system of the Bombay Stock Exchange (BSE), resulting in orders being executed the following day after market recovery had commenced. However, BSE promptly refuted any responsibility for the alleged malfunction.

"A technical glitch at the exchange end on 4th June was not observed. However, some customers experienced delays in payment processing via the UPI channel," stated a BSE spokesperson.

Social media platforms, particularly "X" (formerly Twitter), buzzed with disgruntled users sharing experiences of purchasing mutual funds on June 4, only to find the Net Asset Value (NAV) reflecting transactions on June 5. Among those expressing frustration were investors who utilised platforms such as Zerodha, Groww, Upstox, and Angel One, citing difficulties in squaring off their positions in equities or futures and options (F&O).

The staggering decline in equity markets also impacted mutual fund NAVs, prompting many investors to place purchase orders to seize perceived opportunities at lower prices. However, the processing delay meant that numerous transactions were executed the following day, coinciding with a market rebound of 3 percent.

Inquiries directed at the Reserve Bank of India (RBI) during its monetary policy press conference regarding the issue were met with silence. However, the central bank acknowledged the challenges associated with reducing downtime for Unified Payments Interface (UPI) transactions.

Daily UPI transactions averaging between 40 to 45 crore transactions impose considerable pressure. The RBI clarified that while there were no delays from the National Payments Corporation of India (NPCI) end, issues may arise at the banking end. Efforts are underway to resolve these challenges in collaboration with specific banks.

Reports indicate that these delays resulted in significant losses for investors, with some experiencing up to a 3 percent loss on their mutual fund purchases on June 4. Additionally, investors in exchange-traded funds (ETFs) faced challenges as these assets traded at significantly higher prices than their actual value during the period of market volatility.