The Finance Ministry is set to issue a new set of guidelines for SIP investments upto Rs50,000 in Mutual Funds relaxing the need to produce Permanent Account details. PAN was required under the Prevention of Anti-money Laundering Act (PMLA) to establish the identity of the person making the investment. As Systemtic Investment Plan transactions are routed thorugh the Banking channels, the identity of the investor can be easily established.
Dhirendra Kumar of Valueresearchonline.com feels that this is a positive development for the mutual fund industry particularly at a time when everybody is talking about extending financial services to the "bottom of pyramid" population and would also open up the Mutual fund avenue for more than 100 crore Indians who don't have a Permanent Account Number.
As more and more people are interested in investing in the stock markets using the Mutual Fund route and with the advent of products like Micro SIP's, where the monthly contribution can be as low as Rs50, this is definitely would give a fillip to the Mutual Fund industry in augumenting the funds under management.
As per Economic Times, KYC process would still be enforced for Mutual Fund Investments.
Please note that this relaxation is still not official as AMFI India, the umbrella organisation of Mutual Funds in India is yet to receive the Government order.
Thursday, June 18, 2009
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