6wresearch logo

Sebi mulls allowing mutual fund purchases on mobile wallet platforms

August 15, 2016

NEW DELHI: With the number of smartphone users in the country increasing every day, electronic payment applications or mobile wallets are creating the next wave of change in the way people make payments.

Capital market regulator Securities and Exchange Board of India (Sebi) is planning to cash in on this opportunity and has initiated efforts to broaden investor participation in the equity markets. The capital markets regulator is mulling allowing purchase of mutual fund units using digital wallets or e-wallets.

While the Securities and Exchange Board of India (Sebi) is in talks with the Reserve Bank of India to sketch out the ways in which this could be done, analysts are welcoming the move.

Jitendra Solanki, a Sebi certified investment advisor said, "What Sebi has done is to bring growth in the mutual funds industry by tapping these users. Digital wallets will increase their penetration significantly, since it will bring the ease of investing which Gen Y demands. The growth of direct plans have seen the maximum participation from tech-savvy investors and digital wallets will bring even the non-tech savvy to the mutual funds industry."

Digital Wallets have been a significant game changer in the country, especially among youth. According to research by 6Wresearch, India has around 135 million wallet users and Paytm alone has more than 100 millionon its platform. This is double the quantum of users Visa and Maestro have combined.

It is estimated that the digital wallet industry will grow at 68 percent compounded annual growth rate (CAGR) and is expected to touch $11.5 billion by 2022.

In India, around 70 percent of domestic savings goes into bank fixed deposits and the mutual fund industry sees a huge scope for growth. However, experts believe that the low demand of mutual funds from public outside major cities is due to low levels of financial literacy, cultural attitudes towards savings and investments. Banking correspondents should also be engaged to provide basic knowledge of investing and savings to tier 2 and 3 cities to see growth in mutual funds.

At present, with declining rates on fixed deposits and more investors opting for systematic investment plans to invest in equities, assets under management (AUM) of equity mutual funds have grown at a record high to Rs 4.5 lakh crore at the end of July, according to Association of Mutual Funds in India (Amfi) data.

According to the RBI, there are three kinds of wallets - closed, semi-closed and open wallets. For financial transactions, companies who have been established as open and semi closed wallets alone are eligible.

Oxigen Services India Private Limited, Citrus Payment Solutions and Paytm offer semi-closed wallets.

Anil Rego, chief executive officer and founder, Right Horizons said, "We do not believe that this will have a substantial impact on inflows to mutual funds as the KYC processes, and investor education need to be followed. The digital wallets would be an additional feature, but however this is a positive and welcome step."

Media Source: New Indian Express

      Browse More Report

India UAV Market Report (2017-2023)

Market Forecast By UAV Types (Mini–UAVs (Low Altitude-Low Endurance), Medium Range UAVs (Low Altitude-Medium Endurance), Long Range UAVs (Medium Altitude-Long Endurance, MALE) and Long Range UAVs (High Altitude-Long Endurance, HALE), By UAV Range (Mini-UAVs (under 3mi & 4mi-10mi) and Medium Range UAVs (5mi-10mi & 11mi-20mi)...

Read More

UAE Video Surveillance Market (2017-2023)

Market Forecast by Types (Analog Video Surveillance Systems (Analog Camera and DVR), IP Video Surveillance Systems (IP Cameras, NVR and Encoder/ Decoder), Surveillance Software (Video Management Software, Video Analytics Software and Others))...

Read More

India Air Conditioner Market (2017-2023)

Market Forecast by AC Types (Window AC, Split AC, Floor Standing, Cassette Type, Packaged, Ducted Split/Ceiling Concealed, Centralized (Chiller, VRF and AHU/FCU)), Applications (Residential, Commercial & Retail Buildings, Government & Transportation, Hospitality and Others)...

Read More

India Lithium Ion Batteries Market (2017-23)

Market Forecast by Applications (Automotive, Industrial, Consumer Electronics and Others (Medical, Military and Textile)), Materials (Lithium Cobalt Oxide, Lithium Manganese Oxide, Lithium Iron Phosphate and Others (Li Nickel Cobalt Aluminum Oxide and Li Titanate))...

Read More

Africa Fire Safety Systems and Equipment Market (2017-2023)

Market Forecast by Types (Fire Fighting Systems and Equipment (Fire Extinguishers (Dry Chemical Fire Extinguisher, CO2 Fire Extinguisher, Clean Agent Fire Extinguisher, Foam Fire Extinguisher, Wet Chemical Fire Extinguisher and Water Fire Extinguisher...

Read More

India 5-30 Hp Diesel Engine Market (2018-2023)

Market Forecast by Types (Horizontal and Vertical Engine), Cylinder Types (Single, Double, Triple and Four), Applications (Agricultural, Automobiles, Power and Others), Regions (Northern, Western, Eastern and Southern) and Competitive Landscape

Read More

Middle East Diesel Genset Market (2017–2023)

Market Forecast By KVA Ratings (5-75 KVA, 75.1-375 KVA, 375.1-750 KVA, 750.1-1000 KVA and Above 1000 KVA), Applications (Retail & Logistics, Oil & Gas, Government & Transportation, Rental, Commercial and Others), Countries...

Read More

India Electric Vehicle Powertrain Systems Market (2017-2023)

Market Forecast By Technology (Battery Electric Vehicle Powertrain and Hybrid Electric Vehicle Powertrain), Components (Transmission, Battery, Motor/Generator, Engine and Controller)...

Read More

GCC Video Surveillance Storage Market (2017-2023)

Market Forecast by Product Device (SAN, DAS and NAS), Deployment (Cloud, Hybrid and On-Premise), Verticals (Government & Transportation, Retails, Enterprise & Data Centers, Residential, Healthcare & Hospitality, BFSI and Others), Countries...

Read More


Our Key Clients
6wreserach client list