To simplify the process of registration for SIPs for the end-customers as well as mutual fund distributors and members, NSE on Thursday introduced the aadhaar backed e-mandate facility with immediate effect. The procedure shall reduce the time involved in SIP registration to just 2-3 days instead of the otherwise 2-3 weeks cycle earlier.
In current practise, mutual fund sellers register mandates for investors in physical forms that need to be signed by them and submitted for further processing.
NSE's Managing Director & Chief Executive Officer Vikram Limaye said: "Implementation of E-mandates is a very significant step towards digitisation of transactions in mutual funds. The objective is to offer simple and hassle-free alternative to the members/MF distributors in form of e-mandate wherein the members/MF distributors can register mandate of an investor online, which will be digitally signed based on Aadhar based OTP validation."
Features of the E-mandate scheme for mutual funds
Individual investors who hold mutual funds in a single mode can only avail of the e-mandate facility.
As E-mandate is an aadhaar-based feature, your mobile number is mandatorily required to be registered with the UIDAI as without it you shall not be able to sign mutual fund mandate electronically.
For successful e-mandate registration, aadhaar should be updated or seeded to the bank account which is being provided in mutual fund mandate.
E-mandate registration for mutual funds is allowed for NPCI-enabled banks and currently 28 banks provide e-mandate facility via NPCI.
There is also a maximum cap of investment of Rs. 1 lakh for e-mandate mutual fund registration.