If you’re an investor in a liquid fund, your fund house will soon give you the option to access your idle money anytime, much like with a bank account.

Securities markets regulator SEBI announced on Wednesday, after its first board meeting with the new Chairman Ajay Tyagi, that mutual funds can offer instant access facility (via online mode) of up to ₹50,000 or 90 per cent of the folio value, whichever is lower, to retail investors in liquid schemes.

For this, the lower of the two – the previous day’s net asset value (NAV) or the prospective NAV – would be taken into account. However, funds will need to set aside cash to provide this facility and cannot borrow, SEBI has warned. “This facility can also be used for investment in mutual funds through tie-ups with payments banks, provided necessary approvals are taken from the RBI,” the regulator said.

Certain fund houses are already offering this facility. SEBI has told them to reduce the limit to ₹50,000 immediately. In non-liquid schemes providing this facility, the instant access option should be completely withdrawn within one month of the circular being issued.

Ajay Tyagi, Chairman, SEBI, said a wider introduction of this facility will encourage retail investors to park their money in liquid schemes of mutual funds, bringing more money directly into the capital markets. Kaustubh Belapurkar, Director – Fund Research, Morningstar Investment Adviser India, said the instant access facility is a welcome move. “Introduction of instant access facility of up to ₹50,000 should help investors draw greater comfort of instant access to funds in case of emergencies. But this needs to be coupled with the continuing investor education initiatives to educate investors of the benefits of investing in mutual funds, which should help mutual funds get a larger share of household savings.”

SEBI also announced that retail investors can invest up to ₹50,000 per mutual fund per financial year through e-wallets. However, redemption of such investments can be made only to a bank account of the unitholder.

E-wallet issuers must not offer any incentive such as cash-back, directly or indirectly, for investing in MF schemes through them. E-wallet’s balance loaded through cash, debit card or net banking, can only be used for subscription to MF schemes and balance loaded through credit card, cash-back, promotional schemes, etc should not be allowed. Market watchers have said providing a new payment option for investors is a good move, as majority of transactions for MF investments are still paper-based. Belapurkar added that taking a re-look at the ₹50,000 limit for Aadhaar-based e-KYC will help investors truly go online.