HDFC, Birla Sun Life, Peerless and UTI have started accepting cash investments in their schemes.
To expand the reach of mutual funds in hinterland, SEBI in September 2012, allowed fund houses to accept up to Rs. 20,000 in cash per investor, per mutual fund, per financial year.
HDFC
India’s largest fund house by assets HDFC
Mutual Fund started accepting cash investments in its schemes from February 25,
2013.
Investors can walk in to any of the investor service centres (ISC) or HDFC Bank branch to invest in its schemes. Investors have to fill up a deposit slip, application form/transaction slip and mention the scheme name and folio number on the back of the deposit slip. Once the deposit slip if verified by the bank or ISC official, it has to be submitted at the same place for time stamping. The pay-out bank account details are also required to be specified in the application form by the investors. PAN card is not required to invest.
Birla Sun Life
Birla Sun Life does not accept cash transactions from the Top 15 cities. All its schemes are eligible for accepting investments in cash.
One can invest in schemes of Birla Sun Life through the RTA branches of CAMS and bank correspondent outlets of Yes Bank. Investors have to submit the application form along with cash at the RTA branch.
After processing the application, investor is given an acknowledgement slip of the transaction. Alternatively, one can invest through Yes Bank branch if he/she is an existing investor of Birla Sun Life. After initiating the transaction at the bank, one-time password (OTP) is received on investor's registered mobile number which needs to be shared with the Yes Bank Money agent. Once the transaction is processed, BSL will send a confirmation alert via SMS and email to the investor.
This facility is not available for corporates.
Peerless MF
Peerless has tied up with Allahabad Bank for this facility. Unlike BSL, Peerless is accepting cash transactions from some T-15 cities like Pune, Mumbai, Ahmedabad, Chennai, Bangalore, Delhi and Kolkata. Investors have to submit an application form, a deposit slip and cash at the select branches of Allahabad bank for investing in Peerless schemes.
UTI
UTI started this facility for its investors from November 2012. Investors who wish to invest in schemes of UTI have to visit the select branches of Axis Bank or UTI Financial Centres. The list of the locations of UTI Financial Centres is available on the website of the fund house. The procedure to invest is same other fund houses.
When the facility was first announced by SEBI in 2012, not many fund houses were keen to facilitate this option due to the costs and complexities involved in the process. Even now, only four fund houses provide this facility. Fund houses which are facilitating cash transactions say that very few people are investing by cash.
