New Delhi: Leading stock exchange NSE on Thursday announced the introduction of e-mandate facility on its mutual fund platform, a move that will facilitate SIP registrations in 2-3 days as compared to 2-3 weeks earlier.
Currently, trading members and mutual fund 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.
"NSE has taken a step towards 'digital India' by announcing an e-mandate facility on its mutual fund platform. 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 members/MF distributors can register mandate of an investor online, which will be digitally signed based on Aadhaar based OTP validation," NSE Managing Director and CEO Vikram Limaye said in a statement.
e-Mandate, available for individuals with single mode of holding, is an Aadhaar based functionality, accordingly, registration of mobile number with UIDAI is mandatory for e-signing of mandate. Currently, maximum limit for e-mandate is Rs 1 lakh.
As per UIDAI website, there are about 119 crore Aadhaar numbers, which hold a huge potential for mutual fund industry that currently has 6.2 crore folios only.
NSE has implemented e-mandates through HSBC (sponsor bank for the initiative) along with e-Mudhra as an e-sign service provider.
The National Stock Exchange (NSE) has witnessed a very encouraging growth in the mutual fund transactions routed through its Platform. In the current financial year till December 15, about 48 lakh transactions aggregating to Rs 23,345 crore have been processed through its MF platform. In last two years, the exchange has registered a growth of more than 600 per cent in number of transactions, routed through its MF platform.
Further, the number of Systematic Investment Plan (SIP) accounts on the platform have increased from 0.85 lakh as on March 31, 2015 to 4.45 lakh as on December 15, 2017.
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