Mutual funds need to maintain current accounts in multiple banks for ease of doing business: SEBI
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- Last Updated on 6 August, 2021
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SEBI/HO/IMD/IMD-I/DOF5/P/CIR/2021/610, Dated 04.08.2021
As per the current scenario, Mutual funds maintain current accounts in multiple banks including banks having a presence beyond the top 30 cities for receiving subscription amounts, and for payment of redemption proceeds/dividend/ brokerage/commission, etc. However, the mutual fund industry has informed that the RBI has instructed that banks shall not open current accounts for those customers who have availed of credit facilities in form of cash credit/overdraft from the banking system.
On a review, however, RBI has provided an indicative list of accounts stipulated under various statutes and instructions of other regulators that can be opened without such restriction, including accounts for the purpose of new fund offerings and dividend payment.
Considering the request of the mutual fund industry, the SEBI has clarified that mutual funds should maintain current accounts in an appropriate number of banks for the purpose of receiving subscription amounts and for payment of redemption/dividend/brokerage/commission, etc. to facilitate financial inclusion, the convenience of investors and ease of doing business.
Read the Full Circular Here
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