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  3. SBI can restrict offerings to only SBI MF schemes: Sebi chairperson Mad…

SBI can restrict offerings to only SBI MF schemes: Sebi chairperson Madhabi Puri Buch

19 Jul 2024

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Key Takeaways

  • SEBI’s Madhabi Puri Buch stressed:

    • Selling only sister-concern mutual funds is fine unless mis-selling occurs.

  • FY22 data highlights:

    • 97% of SBI's mutual fund commissions came from SBI Mutual Fund.

    • ₹711 crore (52%) of SBI AMC’s commission payout went to SBI.

  • SBI chairperson Dinesh Khara noted:

    • SBI’s open architecture for selling various mutual fund schemes.

  • SEBI’s Madhabi Puri Buch stressed:

    • Selling only sister-concern mutual funds is fine unless mis-selling occurs.

  • FY22 data highlights:

    • 97% of SBI's mutual fund commissions came from SBI Mutual Fund.

    • ₹711 crore (52%) of SBI AMC’s commission payout went to SBI.

  • SBI chairperson Dinesh Khara noted:

    • SBI’s open architecture for selling various mutual fund schemes.

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SBI Fund Management

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Expert Analysis

SEBI Chairperson: SBI can restrict offerings to only SBI MF schemes.

Expert Analysis:

  • Madhabi Puri Buch, SEBI chairperson, clarified:

    • SEBI Chairperson Madhabi Puri Buch clarified at an SBI Mutual Fund event that Banks only selling mutual fund products offered by their sister concern is acceptable unless they’re mis-selling.

    • According to FY22 data from the Association of Mutual Funds of India, about 97% of State Bank of India's mutual fund commissions came from SBI Mutual Fund.

    • In the same period, 52% of SBI AMC’s commission payout (₹711 crore) went to its parent bank, as per the AMC’s annual disclosure data.  

  • Buch emphasized:

    • Buch told Mint, “If an entity decides to sell its own group’s products, I see no issue with it. If SBI has the might of its distribution, why should they not use it.”

    • Buch added that if a fund is underperforming and its sale amounts to mis-selling, safeguards are necessary, but she is confident that the mutual fund ecosystem will address this issue.

    • During the event, Buch recounted how, while leading ICICI Caps (later ICICI Securities), she was questioned about not promoting ICICI Mutual Fund schemes.

  • SBI Open Architecture: Dinesh Khara, SBI chairperson, states that SBI's open architecture allows the bank to sell mutual fund schemes from any company.

  • SBI Commission Data: Despite this, data shows that an overwhelming majority of SBI’s commissions come from SBI Mutual Fund.

Publisher:MINT