Thursday, June 18, 2009

NO PAN REQUIRED FOR SIP IN MUTUAL FUNDS

There is a good news for all those small investors who ,till now, could not invest in mutual funds because they did not have a PAN Card. Since PAN card details were necessary requirement for anyone wanting to invest in mutual funds, a vast majority of small investors were kept out of this . The idea behind PAN card details being asked from investors was to follow KYC (Know Your Customer ) norms . KYC norms intend to eliminate the chances of money laundering.
But, now the regulation allows investment in mutual funds via SIP without PAN details as well. This is however permitted only till investment of Rs 50000. In banks too , the PAN details are asked only on deposit of Rs 50000 or more and in that respect this is consistent.

What this change will do is that it will bring a whole bunch of small investors, who invest in small amounts , into mutual fund fold. They too can save for themselves and invest in mutual funds , thereby reaping its benefits. This will also increase the participation of retail investors in mutual funds industry.


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