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

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.