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The Association of Mutual Funds in India (Amfi), India’s mutual fund lobby, has extended the free-registration scheme for new distributors by three months. The earlier deadline was June 30.
Now, interested distributors can avail of the opportunity till September 30.
“The move was getting positive response and youngsters showed interest. So, we took a decision to extend the period,” said H N Sinor, chief executive officer of Amfi.
Amfi had made the registration fees zero from February 1 this year, to boost the number of distributors and raise mutual fund sales. The association had expected the move to treble the number of its existing distributors from about 50,000 to 150,000.
There are no registration fees for new distributors in the categories of individuals (including senior citizens) and new cadre of distributors. In November 2012, Amfi had slashed the registration fees to Rs 3,000 for three years per distributor, from Rs 5,000.
“We need to increase sales,” said Amfi officials. “But if there are no distributors, especially in the smaller towns and cities, increasing of sales is not possible.”
After Prime Minister Manmohan Singh had talked about re-energising the mutual fund sector last year, the capital markets regulator, Securities and Exchange Board of India (Sebi), came out with a detailed plan in September. The plan included inducting retired government employees and postal agents in the distribution space.
Channelising the high savings of Indian households to equities has been a major challenge for mutual fund players. Despite having one of the world’s highest saving rates (30 per cent-plus), the surplus money could not find its way into mutual funds. As a result, the penetration of these products in India remains less than three per cent of the population.
Although mutual fund executives have acknowledged the huge potential in smaller towns and cities, these places remain untapped. Now that Sebi has allowed fund houses to charge more, if they are able to pull in funds from beyond the top 15 cities, mutual funds are perusing how to use the opportunity well.
