National Stock Exchange of India Ltd (NSE) announced the introduction of e-mandate facility on its mutual fund platform.
The e-mandate facility would help mutual fund distributors to significantly reduce the SIP registration cycle to just two to three days, as compared to two to three weeks earlier. Currently, distributors register paper based mandates for their investors which is time consuming as it involves obtaining signature of an investor on the form and submission of physical form at service centre for processing.
Digital platforms will be the game changers for Indian mutual fund industry. As per UIDAI website, there are approximately 119 crore Aadhar numbers, which holds a huge potential for mutual fund industry which currently has 6.2 crore folios only. The unique folios would be around 1.50 crore.
NSE has implemented e-mandates through HSBC (sponsor bank for the initiative) along with E-Mudhra (Certifying Authority licensed by Controller of Certifying Authorities, under Government of India) as an E-sign service provider.
Key features of the e-mandate Functionality are as follows:
- e-Mandate is available for individuals with single mode of holding
- Currently, maximum limit for E-mandate is Rs 1 lakh
- e-mandate is an Aadhar based functionality, accordingly, registration of mobile number with UIDAI is mandatory for e-signing of mandate
- Updation of Aadhar number in bank account on which mandate is being registered is mandatory for mandate registration
e-mandate can be registered for the banks enabled by NPCI for the same. At present, 28 banks are participating for e-mandate service through NPCI.
NSE has witnessed a very rapid growth in the mutual fund transactions routed through its mutual fund platform. In the current financial year (till December 15, 2017) approximately 48 lakh transactions aggregating to Rs 23,345 crore have been processed through its MF platform. In last two years NSE has registered a growth of more than 600% in number of transactions, routed through its MF platform. Further, the number of SIP accounts on the platform have increased from 0.85 lakhs as on March 31, 2015 to 4.45 lakhs as on December 15, 2017.
