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 Antivirus Software Market (2018-2024)

Market Forecast By End User (Individual, Enterprise and Government), By Applications (Windows, MAC and Android/IOS/Linux), By Product Type (Laptop, Desktop PC and Mobile/Tablet PC), By Sales Channels (Online and Offline), By Regions (Northern, Western, Eastern and Southern), By Tier-I Cities (SOHO (<= 25 Users) and SMB (<= 25 Users))...

Read More

Indonesia Elevator & Escalator Market (2017-2023)

Market Forecast By Segments (Elevators (Passenger, Cargo and Home), Escalator (Moving Stairs and Moving Walkways)), By Services (New installation and Maintenance), By Verticals (Residential, Commercial and Industrial), By Regions (Java, Sumatra, Bali & Nusa Tengaera...

Read More

Laos Switchgear Market (2018-2024)

By Voltage (Low Voltage (< 1.1 kV), Medium Voltage (1.1 kV - 36 kV) and High Voltage (> 36 kV)), By Insulation (Medium Voltage (Air, Gas and Others) and High Voltage (Air, Gas and Others)), By Types (Low Voltage (MCB, MCCB, ACB and Others) and Medium Voltage (Indoor (ISG) and Others ...

Read More

India Dishwasher Market (2018-2024)

Market Forecast By Type (Free-Standing and Built-in), By Applications (Residential and Commercial), By Distribution Channels (Multi Branded Stores, Exclusive Stores and Others), By Regions (Northern, Eastern, Western and Southern)...

Read More

Cambodia Switchgear Market (2018-2024)

Market Forecast By Voltage (Low Voltage (< 1.1 kV), Medium Voltage (1.1 kV - 36 kV) and High Voltage (> 36 kV)), By Insulation (Medium Voltage (Air, Gas and Others) and High Voltage (Air and Gas)), By Types (Low Voltage (MCB, MCCB, C&R, ACB, COS and Others)...

Read More

Thailand Switchgear Market (2018-2024)

Market Forecast By Voltage (Low Voltage (< 1.1 kV), Medium Voltage (1.1 kV - 36 kV) and High Voltage (> 36 kV)), By Insulation (Medium Voltage (Air, Gas and Others) and High Voltage (Air and Gas)), By Types (Low Voltage (MCB, MCCB, C&R, ACB, COS and Others)...

Read More

Myanmar Switchgear Market (2018-2024)

Market Forecast By Voltage (Low Voltage (< 1.1 kV), Medium Voltage (1.1 kV - 36 kV) and High Voltage (> 36 kV)), By Insulation (Medium Voltage (AIS, GIS and Others) and High Voltage (AIS, GIS and Others)), By Types (Low Voltage (MCB, MCCB, C&R, ACB, COS and Others)...

Read More

Vietnam Switchgear Market (2018-2024)

Market Forecast By Voltage (Low Voltage (< 1.1 kV), Medium Voltage (1.1 kV - 36 kV) and High Voltage (> 36 kV)), By Insulation (Medium Voltage (AIS, GIS and Others) and High Voltage (AIS, GIS and Others)), By Types (Low Voltage (MCB, MCCB, C&R, ACB, COS and Others)...

Read More

UAE Kitchen Hood Market (2018-2024)

Market Forecast By Installation Type (Wall Mounted, Island Mounted and Under-Cabinet), By Applications (Residential and Commercial), By Fitting Type (Ducted/Extracting and Ductless/Recirculated), By Regions...

Read More


Our Key Clients
6wreserach client list


6Wresearch Events
6wreserach events