Overview
- Sebi, which published a consultation paper Tuesday, is taking public comments until April 14 on using gift prepaid cards to buy mutual fund units.
- Under the proposal, a buyer could purchase a gift prepaid payment instrument and transfer it to a recipient who redeems it to subscribe to a scheme.
- Funds loaded onto these instruments would have to come only from Indian bank transfers or UPI to keep a clear money trail and meet anti–money laundering rules.
- The plan caps such investments at Rs 50,000 per investor per financial year, with registrars tracking usage and rejecting over‑limit redemptions for refund to the issuer’s escrow account.
- Gift PPIs would carry a one‑year validity, a design meant for small, time‑bound gifts that help new investors try mutual funds without opening accounts first.