SBI Chairman Setty Unveils Rs 250 'Chota SIP' to Enhance Daily Savings in Rural India

Synopsis

The State Bank of India has launched a new Rs 250 'Chota SIP' aimed at enhancing savings among diverse demographics, particularly in rural areas. The initiative promotes daily contributions and is accessible through popular digital platforms without transaction fees.

Key Takeaways

'Chota SIP' allows daily investments of Rs 250.
No transaction fees to encourage financial inclusion.
Available on digital platforms like SBI YONO and Paytm.
Targets first-time and low-income investors.
Aligns with SEBI’s move for small-ticket SIPs.

Mumbai, Feb 18 (NationPress) The recently introduced 'Chota SIP' priced at Rs 250 is designed to assist individuals from diverse backgrounds in building their savings, stated State Bank of India (SBI) Chairperson C.S. Setty on Tuesday.

This initiative aims to enhance the accessibility of systematic investment plans (SIPs), particularly for residents of rural and semi-urban regions, Setty remarked during the NDTV Profit Conclave.

“Unlike traditional SIPs, which are generally executed on a monthly or bi-weekly basis, many investors in smaller towns and villages will be able to make daily contributions under this scheme,” he explained.

This announcement follows the introduction of the Rs 250 investment option by SBI Mutual Fund, in collaboration with the bank (SBI), under the 'JanNivesh SIP' program.

To foster financial inclusion, the bank has opted not to impose any transaction fees for this initiative.

“The entire investment process for the Rs 250 SIP will be conducted digitally, simplifying participation for individuals,” Setty noted.

This initiative is in line with the Securities and Exchange Board of India’s (SEBI) recent suggestion to implement small-ticket SIPs at half the current minimum investment of Rs 500.

As per SEBI’s consultation document published on January 22, investors will be permitted to distribute their funds across up to three schemes, each from a different asset management company.

These SIPs will exclusively be available under the growth option, promoting long-term wealth accumulation.

“The primary goal of this initiative is to motivate first-time investors, individuals from low-income demographics, and those residing in remote locations to commence investing in mutual funds,” Setty declared during the launch on February 17.

To enhance accessibility, SEBI has proposed to reduce related costs, including subsidizing KYC and other charges through the Investor Education and Awareness Fund.

To ensure that users can manage their investments via familiar platforms, the service will be accessible on popular digital applications such as the SBI YONO app, Paytm, Groww, and Zerodha.