Association of Mutual Funds in India Chairman A P Kurian said on Saturday that canalising household money into mutual funds has become a challenge.
Income tax permanent account number requisite, know your customer norms, and lack of level playing field between insurers and mutual funds are the key reasons for the problem, he said.
“We need to see inflows increase from households into mutual funds. This is a constant challenge and struggle for the industry due to some policy framework,” he said.
Kurian was referring to the PAN requirement for investing in mutual funds, and the absence of the same requirement in the insurance industry.
From July 2, the Securities and Exchange Board of India has made it mandatory for existing as well as potential investors to submit a copy of the PAN or an evidence of having applied for the same until the year-end.
From January, no mutual fund applications without a copy of PAN card will be accepted. This has led to slowdown of retail participants in the equity funds and also hit the systematic investment plans and micro SIPs that are targeted at the lower end of the economy.
Amfi head said lack of financial literacy was a hindrance in reaching out to retail investors in remote areas. He voiced concern of low penetration of mutual funds in the country, saying only 4-5 per cent of India’s gross domestic savings go into mutual fund investments compared with as much as 50 per cent in other countries.
Source: Agencies
Income tax permanent account number requisite, know your customer norms, and lack of level playing field between insurers and mutual funds are the key reasons for the problem, he said.
“We need to see inflows increase from households into mutual funds. This is a constant challenge and struggle for the industry due to some policy framework,” he said.
Kurian was referring to the PAN requirement for investing in mutual funds, and the absence of the same requirement in the insurance industry.
From July 2, the Securities and Exchange Board of India has made it mandatory for existing as well as potential investors to submit a copy of the PAN or an evidence of having applied for the same until the year-end.
From January, no mutual fund applications without a copy of PAN card will be accepted. This has led to slowdown of retail participants in the equity funds and also hit the systematic investment plans and micro SIPs that are targeted at the lower end of the economy.
Amfi head said lack of financial literacy was a hindrance in reaching out to retail investors in remote areas. He voiced concern of low penetration of mutual funds in the country, saying only 4-5 per cent of India’s gross domestic savings go into mutual fund investments compared with as much as 50 per cent in other countries.
Source: Agencies
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