After scathing remarks by the market regulator SEBI last week, the Association of Mutual Funds in India is all set to crack down on distributors who have churned investors’ investments and split bulk investments from small cities to below ₹2 lakh to earn extra commission.
In a bid to attract investments from beyond top 30 cities and promote financial inclusion, SEBI had allowed mutual funds to charge an additional expense of 0.30 per cent for retail inflows (up to ₹2 lakh) from smaller cities and this was suspended last week after misuse of the incentives.
