BSE is expected to launch paperless SIP facility on its BSE StAR MF by the end of this month. This feature would allow mutual distributors to register SIPs for their clients online without any paperwork.
A BSE spokesperson said that the new feature would allow investors to start SIP mandates through net banking. A majority of fund houses already provide this facility.
“It is similar to paying your electricity, telephone bills, insurance, credit card bills through net banking. Investors will have to register the scheme code in the biller list through net banking and the payments will be deducted automatically just like ECS,” said a BSE spokesperson. The BSE spokesperson said that this new feature will do away with the requirement of registering ECS mandate.
This is how the new feature works. For new SIP registrations, investors are required to submit NACH form to the fund house. Most banks, especially private sector banks, issue mandates within 15-20 days. In the meantime, investors can pay first installment of SIP through NEFT. This helps AMCs to start SIP immediately without waiting for clearance from their respective banks.
Since the process is completely paperless, the new feature will help cut down SIP rejections and help investors start SIPs faster. Currently, registering a SIP through ECS takes up to 10 days.
