SBI Mutual Fund, in collaboration with Paytm and State Bank of India (SBI), has launched a micro systematic investment plan (SIP) starting from ₹250, under the Jan Nivesh SIP scheme.
Speaking at the launch, the Securities and Exchange Board of India’s (SEBI) chairperson Madhabi Puri Buch said that such small-ticket investments remain an anomaly for global peers, as foreign investors struggle to grasp how a ₹250 or $3 monthly SIP can be viable.
Key challenges
“One of the key challenges was ensuring economic viability. To make it work, we had to ensure that the break-even period was within two to three years. If it exceeded that, we knew that no CEO would push it,” Buch said, calling this one of her “fondest dreams.”
She credited the entire mutual fund ecosystem, including registrar and transfer agents (RTAs), KYC registration agencies, and depositories, for making this initiative feasible.
The initiative is aimed at enabling first-time investors and small savers from rural, semi-urban, and urban areas to invest, thereby promoting financial inclusion and wealth creation for millions of Indian households.
“As part of our commitment to financial inclusion, we aim to ensure there are no charges or commissions on this scheme. It will be a free service for our customers, promoting greater financial participation,” State Bank of India (SBI) chairperson CS Setty said, waiving off transaction fees.
In January, the market regulator proposed to make the small-ticket systematic investment plan worth ₹250 more cost-effective for mutual funds. The draft paper suggests discounted rates from intermediaries and reimbursement from the Investor Education and Awareness Fund to further reduce the break-even time for AMCs to two years–limiting this to one scheme each in up to 3 AMCs.
Even investors are proposed to be allowed to invest in only three schemes. Currently, the scheme is being launched exclusively for the SBI Balanced Advantage Fund.
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