0
Neil Borate
6-8 minutes

While welcoming the move, experts have criticised the limit of ₹2,000 for SIP registration
As of December 2019, the mutual fund industry had 2.97 crore active SIP accounts contributing ₹8,518 crore

In a move that can further increase the mass market appeal of mutual funds, RBI allowed SIPs to be registered via UPI (Unified Payments Interface) through a notification on 10th January. The notification extended the RBI permission for recurring payments without additional factor authentication (such as OTP) given to credit cards, debit cards and digital wallets on 21st August 2019 up to ₹2,000 per transaction. The same limit will also apply to SIPs meaning that an SIP up to ₹2,000 can be registered via UPI. However additional factor authentication will be needed while changing the SIP amount or cancelling it. Lumpsum investment in mutual funds was already allowed through UPI.

While welcoming the move, experts have criticised the limit of ₹2,000 for SIP registration. As of December 2019, the mutual fund industry had 2.97 crore active SIP accounts contributing ₹8,518 crore. This implies an average SIP ticket size of ₹2,861. “For UPI to become the vehicle of choice, the monetary limit will have to be increased and it should have a faster processing time," said Gaurav Rastogi, CEO, Kuvera, an online mutual fund investment platform. “At present E-net mandate up to ₹1 lakh can be registered through net banking as quickly as two business days and it is a completely online process," he added.

However UPI can open up the mutual fund market to customers who do not use net banking but are familiar with popular UPI apps such as BHIM and Google Pay. “You can also register multiple SIPs of ₹2,000 over different days," pointed out Rastogi. At present there are only about 2 crore investors in mutual funds out of India’s population of 135 crore. According to the National Payments Corporation of India (NPCI), UPI currently has around 10 crore users and this should increase to 50 crore in another 3 years.
Join Geezgo for free. Use Geezgo's end-to-end encrypted Chat with your Closenets (friends, relatives, colleague etc) in personalized ways.>>

Post a Comment

 
Top