Only 12 banks out of a total of 69 KYD compliant banks have opted in for the transaction charges. But when you look closely, you find that most of the active banks have opted in, says Ravi Samalad.
Mumbai:
Leading private and foreign banks like Axis, HDFC, ICICI, and Standard Chartered are among those who have opted in. SBI, Bank of Baroda and Punjab National Bank are among the PSU banks that have opted in.
Citibank, HSBC, Kotak, Deutsche and Yes are the significant banks that have opted out.
A private bank can add 11,000 to 12,000 SIPs applications per month, say industry officials. “This is definitely a huge earning opportunity for banks. Those who have large retail focus and have the potential to add substantial SIPs to their books have opted in. Most banks have a SIP target. The transaction charges will also benefit IFAs if they generate volumes,” says Karan Datta, National Sales Head, Axis AMC.
All distributors have an option to either opt in or opt out twice a year.
Cafemutual had earlier reported that nearly 6000 distributors have opted in for transaction charges.
Apart from banks IFAs are also dominant players in mobilizing retail applications. While some IFAs have already started charging a fee from their clients, others are using transaction charges as a marketing tool to attract more investors. “It could be a marketing strategy. Most large IFAs have opted out so that they can attract more investors by saying that they don’t charge a transaction fee,” says a top mutual fund advisor from Mumbai.
Amit Trivedi of Karmyog believes with IFAs developing the confidence to charge a fee, many have decided to opt out. “Most of the IFAs are beginning to find a way to charge their clients. That’s one of the reasons why most distributors have opted out,” says Amit.
