New Delhi, March 25 The market regulator, Sebi, proposed on Tuesday the introduction of gift cards or gift prepaid payment instruments (PPIs) for investments in mutual funds to improve financial inclusion by onboarding new investors in the sector.
Under the proposal, the purchaser of a Gift PPI can gift the prepaid payment instrument to a recipient, who can then use the instrument to subscribe to mutual fund units, Sebi said in its consultation paper.
These PPIs will be funded only through electronic bank transfers or UPI from an Indian bank account, with a validity period of one year from the date of issuance.
Sebi suggested a cap of ₹50,000 per investor per financial year for investments made through gift PPIs.
"The RTAs, on behalf of AMCs, will track how much each investor has invested through Gift PPIs, e-wallets, and cash. If the transaction resulting from a Gift PPI redemption exceeds ₹50,000, the RTA will reject the transaction, and the PPI's face value will be refunded to the issuer's escrow account," it added.
Traditionally, gift cards and prepaid solutions have been used in retail purchases, and their adoption has increased over time, driven by digital payments, offering instant delivery and enhanced security.
The consultation paper comes after Sebi received a proposal from the Association of Mutual Funds in India (AMFI) to consider allowing Gift PPI as a means to invest in mutual fund units.
According to Sebi, "Gift Card/Gift PPI is expected to improve financial inclusion by onboarding new investors in the mutual fund space."
The Securities and Exchange Board of India (Sebi) has sought public comments on the proposals until April 14.