Sachetisation: Expanding Access to Mutual Funds for All

Sebi has introduced a consultation paper proposing 'sachetisation' of mutual funds. This initiative aims at increasing access to mutual funds for low-income groups through small ticket SIPs of Rs 250. Sebi intends to expand financial inclusion and provide incentives to distributors, expecting AMCs to achieve break-even within two years.

In a move to democratize mutual fund investments, the Securities and Exchange Board of India (Sebi) has unveiled a consultation paper on 'sachetisation.' The proposal suggests launching small ticket systematic investment plans (SIPs) worth Rs 250 to promote financial inclusion among low-income groups.

The small ticket SIPs allow investors to join any scheme except debt, sectoral, thematic, small-cap, and mid-cap schemes under the equity category. Sebi believes that sachetisation will empower underserved communities, enhancing the industry's reach and paving the way for greater economic inclusion.

The regulatory body proposes restricting payment modes to NACH and UPI autopay, while incentivizing distributors with a Rs 500 reward for managing small ticket SIPs. The public has an opportunity to comment on these proposals until February 6, with Sebi aiming for AMCs to reach break-even within two years.