In order to boost small investors, the market regulator is mulling instant redemption (withdrawal) for investors in liquid mutual funds. Currently, it takes up to three days to withdraw money or cash out.
The regulator Securities and Exchange Board of India is in talks with mutual funds (MFs) to standardise and introduce instant redemption.
"We need to think about parameters to go along with this. There shouldn't be a liquidity crunch," said G Mahalingam, whole-time member of Securities and Exchange Board of India (Sebi). He was speaking at an event organised by the Association of Mutual Funds in India (Amfi).
