e-Wallets can be used for Purchasing Mutual Funds
RBI is thinking to allow e-Wallets so that the e-Wallets would be able to sell mutual funds. RBI and SEBI held several meetings over this topic of allowing e-Wallets for selling mutual funds. SEBI wants to complete two objectives through this procedure. SEBI would able to promote cashless economy if the e-Wallets starts selling Mutual Funds and SEBI would also be able to trail the black money and limit its usage.
To fulfill their respective objectives SEBI and RBI held several meetings about enabling the purchase of mutual funds via e-wallets. SEBI and RBI also discussed about the rules and regulations regarding the matter of enabling the purchase of mutual funds and it is expected that they would soon disclose the results of the meeting.
Some people are questioning about the logic behind this decision. But we all know that ecommerce portals would be allowed to sell mutual funds very soon. So, the decision to include digital wallets in selling mutual funds seems very logical.
SEBI and RBI are planning to make some important changes in the regulations for operating digital wallets. The current procedure is that the digital wallet users are obliged to go through a KYC (Know Your Customer) procedure and it is mandatory for all the users if they make a transaction of Rs. 10, 000- 1, 00, 000.
But the main fact here is that the digital wallet companies are prohibited to conduct KYC and thus they stop all transactions of more than Rs. 1 lakh. The catch here is that all mutual fund transactions needs KYC as an obligatory condition.
And thus SEBI is planning a design where the digital wallet users would be able to easily invest in mutual funds and they would not be hassled by the paper-work and the KYC process.
But many pundits are criticizing the decision of SEBI by pointing out the main problem of the plan. Money Laundering is the main problem of the plan and thus it is holding the gates for this plan. SEBI addressed the problem and it is expected that SEBI would enforce a cap on the invested amount for buying mutual funds through e-wallet.
Advantages of using E-Wallet
- The government aims to use the E-Wallets as investment tools for mutual funds. Thus the Government is planning to use the E-Wallets for promoting cashless economy. This procedure will be of advantage to the government which can only be done through the help of E-Wallet.
- The money invested using E-Wallets can easily be tracked and limited and thus it will prevent the flow of black money in India.
- The government has also made sure that the E-Wallets are not allowed to provide any interest on the parked money within the wallets. Also, the users of E-Wallets would be able to get returns for their investment using E-Wallets.
- Maximum Indians have never invested in any form of mutual funds and thus this move to allow E-Wallets to turn into investment methods is highly appreciated and it will benefit India and the citizens of India.
|Project Name||Purchasing Mutual Funds through E-Wallets|
|Managed By||RBI and SEBI|
|Purpose||To ensure a hassle free procedure for investors investing in Mutual Funds|