Taking the Harder Path

SEBI in its circular SEBI/HO/IMD/IMD-I DOF5/P/CIR/2021/635 disallowed using pool accounts for investing in mutual funds. 

For entities that are registered as brokers, a pool account was the standard way of handling investments in mutual funds. The process was that customers would load money in their accounts (Groww Balance in our case) and then invest. 

Now when they purchase a mutual fund, the amount goes directly to the exchange (BSE Star in our case).

This looks very simple from the outside. 

But entire systems change under the hood. There are multiple parties involved - exchange, RTAs, banks, PGs, brokers, and customers. 

The entire industry’s participants had numerous discussions to change this system and arrived at a solution.  

The challenge for a platform like ours was to implement this change without stopping the train and impacting the customer experience.

The simpler way was to just stop the investments for a day or two, deploy the changes, and then reopen the systems. This is what a lot of other platforms did. 

But this is not the Groww way of doing things. 

Our team wanted to provide a seamless transition to customers. They worked through multiple nights to ensure this happened.

One good thing was that the team was done with almost all the work 3 months ago when the original deadline for this change was 1 April 2022. So most of the system changes were already ready except for the new things that were decided later along with the remaining parties involved.

Customers are now investing in mutual funds with no fundamental change in their experience. 

And the people behind the scene smile gently as the transactions keep happening while externally nobody knows what happened under the hood for numerous days and nights.

Author: Lalit Keshre