With an eye on smaller centres, Sebi ups cash investment limit in MF

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With an eye on smaller centres, Sebi ups cash investment limit in MF

In a bid to boost investor participation into mutual funds from smaller centres, capital market regulator Securities and Exchange Board of India (Sebi) has allowed asset management companies (AMC) to accept cash investments of up to Rs 50,000. Earlier, cash transaction limit was set at Rs 20,000.

Senior industry officials said that increasing cash transaction limit will mobilize funds from beyond 15 cities.

"The move will certainly help channelise more savings from smaller towns," said Vikaas Sachdeva, CEO of Edelweiss Mutual Fund.

The industry experts also said that deeper mutual fund penetration could even help in curbing the menace of dubious investment schemes, which have become rampant in non-metro centres.

"The increased limit for cash transaction is more like offering an additional facility. May not have much of an impact on retail participation but certainly it is a move in the right direction," said Dinesh Khara, CEO SBI Mutual Fund.

Although Sebi has allowed cash transaction up to Rs 50,000, it has said the repayments, dividend for all investments will continue to be paid only through the banking channels.

Currently, only few fund houses like UTI Mutual Fund, SBI Mutual Fund offer the facility of cash transactions to investors. A lot of fund houses had taken a conscious decision of not accepting cash.

"While, the move does help in penetration it is difficult for fund houses to accept cash as they need to have strong infrastructure and work force to handle cash," said Jimmy Patel, CEO of Quantum Mutual Fund.

Cash investments are aimed at those investors who want to invest in the so-called micro systematic investment plans (SIPs).

Micro SIP is a facility that allows investors to invest in very small tranches at periodic intervals. The know your client (KYC) norms too are relaxed for Micro SIPs investments.
Thanking you

Regards,

Rajesh Kumar Kathpalia ¤ SMC Global
17,Netaji Subhash Marg,Daryaganj,
New Delhi-110002 Mobile No 9891645052
Email Id: rajesh.ipo@smcindiaonline.com


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