SBI Mutual Fund, which today launched a systematic investment plan (SIP) with a minimum monthly contribution of Rs 100, has approached the government seeking a relaxation in the know-your-customer (KYC) norms.
The fund house has proposed that the government allow those investing up to a specified amount, to contribute on a monthly basis without submitting a permanent account number (PAN), which is a must for all mutual fund investments.
SBI Chairman OP Bhatt told reporters that the move would help to get more participation in the scheme. While SBI MF is hoping to get around 250,000 investors to invest in ‘Chota SIP’, the product aimed at the lower income group, the subscription level could rise to 1 million if the PAN requirement was done away with.
Bhatt said that the government, which had already simplified the rules for no-frills accounts, was examining the proposal and a decision was expected after the general elections were over.
SBI is the latest to join the segment which already has ICICI Prudential and Reliance Mutual Fund offering SIPs with a minimum monthly investment of Rs 50 and Rs 100 respectively.
SBI is hoping to leverage its distribution reach of over 11,000 branches to attract more investors. The bank has also decided to set targets for its branches to sell these products from this year.
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Bhatt said that, this year, the bank is looking to open 1,000 branches, a bulk of which would be in smaller towns and rural areas.
Additionally, it is planning to hire 100,000 banking correspondents by the end of March 2011 to deal with customers in villages where there are no bank branches.