SEBI has allowed investors to buy mutual funds through e-wallets

Market regulator SEBI has approved the proposal to permit the investors to purchase mutual funds worth up to Rs 50,000 through e-wallets.

The proposal is tochannelise the efforts of household savings into the capital market as well as to promote the digital payments in the mutual funds industry. The said proposal was adopted by SEBI in its board meeting held on April 26, 2017.

"Investments up to Rs 50,000 per mutual fund per financial year can be made using e-wallets," the regulator said while redemptions of such investments can be made only to the bank account of a unit holder.

E-wallet issuers will not be permitted to offer any incentive such as cash back, directly or indirectly, for investing in mutual fund scheme through them. Besides, the e-wallet's balance loaded through cash or debit card or net banking can only be used for subscription to mutual funds schemes.

Balance loaded through credit card, cash back, promotional schemes would not be allowed for subscription to mutual funds.

The limit of Rs 50,000 would be an umbrella limit for investment by an investor through e-wallet and/or cash, per mutual fund, SEBI said in a release. However, redemptions of such investments can be made only to a bank account of the unit holder.

Besides, in the same board meeting, SEBI, allowed the mutual funds and asset management companies to provide instant online access facility to resident individual investors in liquid schemes.

In this case, the limit would be up to Rs 50,000 or 90 per cent of folio value, whichever is lower.

For providing such facility AMCs would not be allowed to borrow. Liquidity is to be provided out of the available funds from the scheme and AMCs to put in place a mechanism to meet the liquidity demands.

This facility can also be used for investment in mutual funds through tie-ups with payments banks provided necessary approvals are taken from the RBI and SEBI.

Source: PTI, SEBI Press Release

Disclaimer – This document is for general information only and does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this information. This document provides general information on performance; financial planning and/or comparisons made are only for illustration purposes. The data/information used/disclosed in this document is only for information purposes and not guaranteeing / indicating any returns. This material provides general information and comparisons made (if any) are only for illustration purposes. Investments in mutual funds and secondary markets inherently involve risks and recipient should consult their legal, tax and financial advisors before investing. Recipient of this document should understand that statements made herein regarding future prospects may not be realized. Recipient should also understand that any reference to the indices/ sectors/ securities/ schemes etc. in the document is only for illustration purpose and should not be considered as recommendation(s) from the author or L&T Investment Management Limited, the asset management company of L&T Mutual Fund or any of its associates. Recipient of this information should understand that statements made herein regarding future prospects may not be realized or achieved. Neither this document nor the units of L&T Mutual Fund have been registered in any jurisdiction except India. The distribution of this document in certain jurisdictions may be restricted or totally prohibited and accordingly, persons who come into possession of this document are required to inform themselves about, and to observe, any such restrictions.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.