SEBI’s Sachetisation of Mutual Funds
- 25 Jan 2025
In News:
In January 2025, the Securities and Exchange Board of India (SEBI) proposed the “sachetisation” of mutual fund investments to promote financial inclusion, especially among low-income and first-time investors.
What is Sachetisation?
- Originating from the FMCG sector (e.g., shampoo sachets), sachetisation refers to offering financial products in small, affordable units, enhancing accessibility and affordability.
- In capital markets, it implies micro-level investment options, particularly through low-ticket SIPs (Systematic Investment Plans).
Objectives:
- Promote financial inclusion and empower economically underserved sections.
- Expand mutual fund penetration to semi-urban and rural areas.
- Encourage long-term savings and wealth creation among new investors.
- Reduce dependency on large institutional or foreign investors by broadening the domestic retail base.
Key Features of SEBI’s Sachet SIP Proposal:
Feature Details
Minimum SIP Amount ?250 per month
Eligibility Only for new mutual fund investors
Investment Limit Up to 3 sachet SIPs across different AMCs
Excluded Schemes Debt funds, sectoral/thematic, small-cap, mid-cap equity funds (due to higher risk)
Commitment Period Encouraged to commit for 5 years (60 SIPs), but premature withdrawal allowed
Payment Modes Only via auto-pay mechanisms such as UPI Autopay and NACH
Cost Incentives AMCs to receive subsidies from SEBI’s Investor Education and Awareness Fund
Distributor Incentive ?500 per investor after completion of 24 monthly SIPs
Significance:
- Democratizes investment access by lowering the entry barrier for mutual funds.
- Encourages behavioral shift towards long-term financial planning and discipline.
- Stabilizes domestic markets by broadening and diversifying the retail investor base.
Supports SEBI’s vision of making capital markets inclusive, tech-enabled, and accessible.