E-wallets since their boom post-demonetisation have generally been used for expenditure. However, these web based applications can now be used to invest and thus potentially gain as well.
In a move aimed at promoting digitisation and providing varied options to citizens for investments, SEBI has allowed investors to purchase mutual funds worth up to Rs 50,000 through digital wallets. The permission also comes with an effort to channelise household savings into the capital market.
"Investments up to Rs 50,000 per mutual fund per financial year can be made using e-wallets," the regulator said, while redemptions of such investments can be made only to the bank account of a unit holder.
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Issuers of the web-based kitty shall not be permitted to offer any incentive such as cash back, directly or indirectly, for investing in mutual fund schemes through them. Besides, the e-wallet's balance loaded through cash or debit card or net banking only can be used for subscription to mutual fund schemes. Balance loaded through credit card, cash back, promotional schemes would not be allowed for subscription to mutual funds.
"The limit of Rs 50,000 would be an umbrella limit for investment by an investor through e-wallet and/or cash, per mutual fund. This facility can also be used for investment in mutual funds through tie-ups with payments banks provided necessary approvals are taken from the RBI," said Sebi in its release. Currently, any scheme providing such a facility will be required to reduce the limit to Rs 50,000 immediately.
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After liquidity stabilised in the economy people were seen getting back to cash for transactions and the use of these applications was on the decline. However, with the introduction of investing options, the popularity of web-based money transactions is expected to soar again. Moreover, with the government keen on instilling financial literacy among its citizens, it shall be interesting to see the wherewithal of innovations such as this.
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