In its budget proposals, AMFI has requested the government that mutual fund companies should be exempted from facilitating payment through debit card powered by RuPay.
"It is requested that providing a facility to make payment by way of ‘Debit Card powered by RuPay’ should not be mandatory for a mutual fund," the industry body said in a Budget wishlist released on Monday.
According to the government norms, businesses with over Rs. 50 crore turnover will have to provide the following digital modes of payment:
1. Debit card powered by RuPay
2. Unified Payments Interface (UPI)
3. Unified Payments Interface Quick Response Code (UPI QR code)
In case of failure to do so, businesses are liable to a penalty of Rs 5000 per day.
AMFI has requested government to exempt mutual funds from this rule.
AMFI said that the payments through debit cards lead to tax evasion as the source of fund is untraceable. "Mutual Funds do not accept third party payments to prevent money laundering. Where payment is accepted from investors through Debit card, the source of funds cannot be identified. This results in a breach of the PMLA norms. It may also lead to tax evasion," it said.
Experts believe that the costs of operations increase with such facilities. “Most businesses factor in the cost of such a facility in their end product. Since mutual funds offer investment products at prevailing NAV, there is no cost provision attached to it.”
