SEBI Mutual Fund-Insurance Combo: Plan Stalls on Industry Doubts
Why in the news
SEBI’s proposal to bundle mutual funds with insurance has lost momentum because the industry doubts it, and the regulator’s change of chief adds uncertainty.
Key facts
- Floated in January 2025 by Madhabi Puri Buch to make investing cheaper and accessible.
- SEBI’s MF advisory committee wants pure investment products.
- Bundled products were allowed until June 2022, then banned.
- SEBI was studying AMFI suggestions; Tuhin Kanta Pandey now heads SEBI.
| Industry objection | Reason |
|---|---|
| Product purity | No extra insurance features in funds |
| Operations | Claims would burden fund houses and distributors |
Background
- MF penetration remains concentrated in top cities.
- Minimum investment was cut from ₹500 to ₹250 to draw retail investors.
Exam angle
- Industry body: AMFI.
- Combo ban year: 2022.