In a bid to take mutual fund investments to the masses, Sahara Mutual Fund is proposing to launch a scheme that will accept investments on a daily basis, and for as little as Rs 10. The fund house, part of the Sahara India group, has filed draft prospectus with the regulator for Sahara Daily Fund, an open-ended debt scheme that will invest in high- quality debt and money market instruments.
Interestingly, Sahara MF's new scheme is being planned exactly two years before Sahara India Financial Corp (SIFCL) is scheduled to stop accepting public deposits, including daily deposits, under directive from the Reserve Bank of India (RBI). In a release dated June 17, 2008, RBI had directed SIFCL not to accept any new deposit with maturity after June 30, 2011. It has also been asked to stop accepting instalments of existing deposit accounts effect the same date.
Speaking to TOI, Naresh Kumar Garg, CEO, Sahara MF, said that the fund house plans to leverage technology and Sahara's wide network of representatives to take its Daily Fund scheme even to daily wage earners and small shop owners. "There is an entire population that was not thought of by the conventional mutual fund houses. This fund has the potential to help in financial inclusion that the government is talking about for so long,'' Garg said. "Our fund is compatible with the concepts of micro savings-micro investments,'' the Sahara MF CEO added.
The fund house plans to use Sahara's representatives across India to collect on a daily basis a small amount from even daily wage earners, shopkeepers and others willing to invest in the scheme. Using technology, the investor will be given a printed acknowledgement slip on the spot and allotments of units will be done as per Sebi rules. "The plan is to put mutual fund investments on a different platform,'' Garg said.
According to the draft offer document for Sahara MF's Daily Fund, the scheme will invest in debt and debt-related assets, including money market instruments. The minimum investment is Rs 10 and further investments in multiples of Re 1.
Some see Sahara MF's moves as taking systematic investments to a new `Nano' level. At present, micro SIPs in the range of Rs 50-100 exist in the fund industry, but those mostly come through the cooperative or union route, thus bringing down the cost of monthly collection. Industry players feel that Sahara MF's scheme could provide a low-risk investment solution for the fund's target audience as it will invest mainly in debt and debt related instruments, in the long run which can give yields between 3.5% to 10%.
Relating to its directive from the central bank, in June last year, other than asking SIFCL to stop taking public deposits from June 2011, it was also asked to repay all the public deposits as and when they mature and bring down its deposit liabilities to zero on or before June 30, 2015. "SIFCL shall not treat non-payment of instalments under any running daily deposit or other recurring deposit schemes by depositors after June 30, 2011, as a default by depositor and SIFCL shall be liable to pay the agreed rate of interest on the amounts actually held by it for the entire term of the deposit as if there was no default,'' RBI had noted in the release.
Interestingly, Sahara MF's new scheme is being planned exactly two years before Sahara India Financial Corp (SIFCL) is scheduled to stop accepting public deposits, including daily deposits, under directive from the Reserve Bank of India (RBI). In a release dated June 17, 2008, RBI had directed SIFCL not to accept any new deposit with maturity after June 30, 2011. It has also been asked to stop accepting instalments of existing deposit accounts effect the same date.
Speaking to TOI, Naresh Kumar Garg, CEO, Sahara MF, said that the fund house plans to leverage technology and Sahara's wide network of representatives to take its Daily Fund scheme even to daily wage earners and small shop owners. "There is an entire population that was not thought of by the conventional mutual fund houses. This fund has the potential to help in financial inclusion that the government is talking about for so long,'' Garg said. "Our fund is compatible with the concepts of micro savings-micro investments,'' the Sahara MF CEO added.
The fund house plans to use Sahara's representatives across India to collect on a daily basis a small amount from even daily wage earners, shopkeepers and others willing to invest in the scheme. Using technology, the investor will be given a printed acknowledgement slip on the spot and allotments of units will be done as per Sebi rules. "The plan is to put mutual fund investments on a different platform,'' Garg said.
According to the draft offer document for Sahara MF's Daily Fund, the scheme will invest in debt and debt-related assets, including money market instruments. The minimum investment is Rs 10 and further investments in multiples of Re 1.
Some see Sahara MF's moves as taking systematic investments to a new `Nano' level. At present, micro SIPs in the range of Rs 50-100 exist in the fund industry, but those mostly come through the cooperative or union route, thus bringing down the cost of monthly collection. Industry players feel that Sahara MF's scheme could provide a low-risk investment solution for the fund's target audience as it will invest mainly in debt and debt related instruments, in the long run which can give yields between 3.5% to 10%.
Relating to its directive from the central bank, in June last year, other than asking SIFCL to stop taking public deposits from June 2011, it was also asked to repay all the public deposits as and when they mature and bring down its deposit liabilities to zero on or before June 30, 2015. "SIFCL shall not treat non-payment of instalments under any running daily deposit or other recurring deposit schemes by depositors after June 30, 2011, as a default by depositor and SIFCL shall be liable to pay the agreed rate of interest on the amounts actually held by it for the entire term of the deposit as if there was no default,'' RBI had noted in the release.
No comments:
Post a Comment