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SEBI proposes Gift PPI cards for mutual fund investing, capped at Rs 10000, non reloadable, one year validity, no cash use, full amount must be invested by the recipient.
Sebi proposes to allow people gift mutual fund via prepayment cards
Sebi has proposed to introduce Gift cards or Gift PPI (Prepaid Payment Instruments) for investing in mutual funds. It simply means that customers can gift a mutual fund investment to someone using a prepaid card.
The proposed option aims to increase financial inclusion among people and bring new investors into mutual funds.
How Will It Work?
A person will be able to purchase a Gift card or PPI for investing in a mutual fund. The person can then give that gift card to whomever they wish to give, so they will be able to redeem and purchase mutual fund units via AMC websites.
What are key things in the proposal?
The recipient of the gift card or PPI will have the full investment flexibility to invest in whichever scheme they want. However, the recipient must use the entire PPI amount without any partial use available or in tranches.
However, SEBI has proposed a strict regulatory framework to ensure safety and compliance:
- The maximum value of a Gift PPI is capped at Rs 10,000, and it cannot be reloaded
- Total investment via such instruments, along with e-wallets and cash, is limited to Rs 50,000 per financial year per mutual fund
- The instrument will have a validity of one year, after which unused funds will be refunded to the purchaser
- Additionally, cash withdrawals are not allowed, and funds can only be used for mutual fund subscriptions.
- Investor using PPI must be the same person as owner.
- Transactions failing this check will be rejected and funds returnedOnly funds loaded via bank transfer or UPI from Indian accounts will be permitted
- The entire value of the Gift PPI must be invested, with no partial usage allowed
- Further, redemption proceeds will be credited only to the investor’s bank account, in line with existing regulations.
- SEBI has clarified that issuance costs of Gift PPIs will be borne by AMCs, not investors.
Mutual funds will also be required to:
- Clearly disclose terms such as validity, refund rules, and grievance mechanisms
- Avoid misleading practices or “dark patterns” in digital interfacesEnsure investor protection and proper grievance redressal
March 25, 2026, 10:45 IST
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