Mutual funds need to maintain current accounts in multiple banks for ease of doing business: SEBI

  • Blog|News|Company Law|
  • < 1 minute
  • By Taxmann
  • |
  • Last Updated on 6 August, 2021

Mutual Funds

SEBI/HO/IMD/IMD-I/DOF5/P/CIR/2021/610, Dated 04.08.2021

As per the current scenario, Mutual funds maintain current accounts in multiple banks including banks having a presence beyond the top 30 cities for receiving subscription amounts, and for payment of redemption proceeds/dividend/ brokerage/commission, etc. However, the mutual fund industry has informed that the RBI has instructed that banks shall not open current accounts for those customers who have availed of credit facilities in form of cash credit/overdraft from the banking system.

On a review, however, RBI has provided an indicative list of accounts stipulated under various statutes and instructions of other regulators that can be opened without such restriction, including accounts for the purpose of new fund offerings and dividend payment.

Considering the request of the mutual fund industry, the SEBI has clarified that mutual funds should maintain current accounts in an appropriate number of banks for the purpose of receiving subscription amounts and for payment of redemption/dividend/brokerage/commission, etc. to facilitate financial inclusion, the convenience of investors and ease of doing business.

Read the Full Circular Here

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied