Sebi allows investment of upto Rs 50,000 in mutual funds through e-wallets

In a step that is in tune with the government's drive towards a digital economy, the Securities and Exchange Board of India (Sebi) on Wednesday announced that people could invest up to Rs 50,000 in mutual funds through e-wallets.

Sebi today issued a press statement saying that the investment of upto Rs 50,000 per mutual fund in a financial year can be made using e-wallets. However, redemptions of such investments can be made only to a bank account of the unit holder.

"E-wallet issuers must not offer any incentive such as cash back etc., directly or indirectly for investing in mutual fund scheme through them," the press statement said.

"E-wallet's balance loaded through cash or debit card or net banking, can only be used for subscription to mutual funds schemes and balance loaded through credit card, cash back, promotional scheme should not be allowed for subscription to MF schemes," Sebi said.

Further, this limit of INR 50,000 would be an umbrella limit for investment by an investor through e-wallet and/or cash, per mutual fund per financial year

Mutual Funds/Asset Management Companies (AMCs) can offer instant access facility (through online mode) of upto Rs 50,000 or 90 per cent of folio value, whichever is lower, to resident individual investors in liquid schemes by applying lower of Previous Day NAV or Prospective NAV.

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 RBI.

Presently, any scheme providing this facility would reduce the limit to Rs 50,000, immediately and other than liquid schemes providing this facility would completely stop this facility within one month from the date of circular.