Invest in Mutual Fund through e-wallets

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Securities and Exchange Board of India (SEBI) is gearing up to enable investment in Mutual Funds through e-wallets such as Paytm, Rupay, Mobikwik and so on. SEBI’s move comes in to promote the cashless drive and the e-wallet companies will be able to expand their customer base by getting mutual fund investors to pay through their platforms. SEBI has however put ceiling of Rs 50,000 per month for the customers who want to invest in the Mutual Funds, going e-wallet route. In order to start the investment, e-wallet companies should have the non additional KYC documents from the customers.

The Plan

A survey done back in June 2016, concluded that there are total of 49 million mutual fund investors in India and a total of 44

Mutual Fund through e-wallets

Mutual Fund through e-wallets

mutual fund companies serving these customers. In this regard, SEBI invited Reliance Mutual Fund to give a presentation to the mutual fund advisory committee and tell them about the new online app for investment known as Reliance SimplySafe. All the e-wallet transaction are and in future will be regulated be the Reserve Bank Of India. Authorities are keen to give the customers more options to go online and do the transaction at least in the capital market space. Both the regulatory bodies, SEBI and RBI are looking to bring major overhaul in the rule for operating digital wallets. Digital wallet users will have to furnish duly filled KYCs for transaction between Rs 10,000 and Rs 1,00,000.

Rates for Fixed deposits is declining and investors are keen to invest in equities through systematic investment plans. Assets under management of equity mutual funds have surged record high of Rs 4.5 lakh crore at the end off July according to the report released by Association of Mutual Funds in India (Amfi). The Reserve Bank of India states that there are three kind of wallets:-

  • Closed wallets
  • Semi closed wallets
  • Open wallets

Companies who offer open and semi closed wallets are eligible for financial transactions according to the RBI. Paytm, Oxigen Services India Private Limited, Citrus Payment Solutions offer semi closed wallets. SEBI wants to bring digital wallet for investors to invest in mutual funds to reduce the hassle free and paper free KYC procedures. Digital wallet payment will increase the investment in mutual fund and also check the money laundering via cashless transactions. Once the investors decide to invest in the mutual funds through digital wallets, these websites will nudge the investor if the products they are investing in is not suitable compared to risk taking abilities. Investor will be able to select from the string of Mutual Funds products a after filling in the personal and income details. Other details that investors will require to submit is

  • Age
  • Location Details
  • Income Proof

SEBI is of the view that this will be a mutual benefit for the young investors who prefer to make online payment and also for the government and authorities who are cracking down on the black money and laundering.


About Author

An MBA in finance, I like to cover the wide range of topics related to Taxation, SEBI, Finance and anything that is Public Helpful. The motive is always to make it simpler for the taxpayers understand the system better and take informed decisions.

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