Mutual Funds Could Soon Be Gifted Like Vouchers
A recent circular by SEBI has proposed allowing gift cards for mutual fund investments.
What are Gift PPIs?
A Gift PPI (Prepaid Payment Instrument) can be purchased and given to a recipient, who can use it to invest in mutual funds. The fund flow from issuer to purchaser to redeemer will follow Reserve Bank of India (RBI) guidelines, while the mutual fund subscription will be regulated by Securities and Exchange Board of India (SEBI) norms.
The buyer receives the Gift PPI (physical or digital) from the issuer via a banking payment and then shares it with the intended recipient. The recipient claims it and uses it to invest in mutual fund units through the Asset Management Company (AMC) website.
The idea is to make it easier for new investors to enter the market, especially those who may find traditional investing processes complicated.
These PPIs will be funded only through electronic bank transfer or UPI from an Indian bank account with a validity period of one year from date of issuance.
How it will work?
You purchase a gift card (PPI) using your bank account or UPI and share it with someone family, friends, or even a child. The recipient can then use it to invest in mutual fund units. It’s similar to gifting money, but with a clear purpose: investing.
Key Rules
Securities and Exchange Board of India has suggested a few safeguards to ensure simplicity and security:
Maximum limit: ₹50,000 per person per financial year. If the ₹50,000 cap is exceeded, the transaction will be declined and the amount will be refunded.
Validity: 1 year from the date of issue.
Monitoring: Investments will be tracked by Registrars (RTAs).
This proposal by the Securities and Exchange Board of India could make investing in mutual funds more accessible and thoughtful by turning it into a purposeful gifting option. With clear safeguards in place, it aims to balance ease of use with investor protection.SEBI has invited public feedback on these proposals, and comments can be submitted through the official link by April 14, 2026.
In case of any technical difficulties while submitting feedback online, individuals can also reach out via email with the appropriate subject line.
SEBI circular
Disclaimer- Mutual Fund investments are subject to market risks, read all scheme related documents carefully before investing.