All international mutual fund schemes are currently not accepting fresh SIP registrations after Baroda BNP Paribas Mutual Fund suspended new SIP registrations in its international fund, according to a report by Value Research.
Existing SIPs registered earlier continue to be processed.
The development reflects an industry-wide constraint linked to overseas investment limits that Indian mutual funds have been operating under for more than three years.
Why are fund houses suspending fresh SIPs?
The restrictions are tied to overseas investment limits set by the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI).
The mutual fund industry can collectively invest up to $7 billion in overseas securities, while investments in overseas exchange-traded funds (ETFs) are subject to a separate $1 billion limit.
These limits were reached in early 2022. Since then, fund houses have gradually restricted fresh inflows into international schemes to avoid breaching the regulatory ceiling. While many first stopped accepting lump-sum investments, several later paused fresh SIP registrations as well.
According to the Value Research report, Baroda BNP Paribas was the last fund house still accepting fresh SIP registrations before announcing the suspension.
Why haven’t the restrictions been lifted?
The overseas investment limits have remained unchanged despite repeated calls from the mutual fund industry for additional headroom.
As a result, fund houses can accept fresh investments only if capacity becomes available through investor redemptions or if regulators revise the existing limits. Until then, many international schemes are expected to continue restricting new inflows.
What options do investors have?
Investors seeking overseas exposure still have a few alternatives.
One option is investing in international ETFs listed on Indian stock exchanges. However, experts caution that some ETFs may trade at a premium to their underlying net asset value (NAV) when fresh unit creation is constrained, potentially making investments more expensive.
Another route is investing directly in overseas stocks or funds under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS), subject to applicable regulations, remittance limits and taxes.
What should investors keep in mind?
Financial planners advise investors to focus on their long-term asset allocation rather than rush into alternatives because fresh SIPs are temporarily unavailable.
Investors considering international ETFs should also compare the market price with the ETF’s NAV, as buying at a steep premium could affect long-term returns.
For now, those looking to begin a fresh SIP in an international mutual fund may need to wait until additional overseas investment capacity becomes available or the regulatory limits are revised.
First Published: Jul 27, 2026 2:55 PM IST