Sebi allows investors to buy mutual funds via e-wallets

Investors will be permitted to purchase mutual funds worth up to Rs 50,000 through digital wallets, the market regulator, Sebi said in a release.

"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.

Besides, mutual funds and asset management companies have been allowed 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.


The release said that the proposal was part of the efforts to channelise household savings into the capital market as well as promote digital payments in the mutual funds industry.

However, E-wallet issuers would 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.

Also, 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.

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.

The instant online access facility could also be used for mutual fund investments by resident citizens. "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," Sebi said.

Currently, any scheme providing the facility would reduce the limit to Rs 50,000 immediately.