3 weeks ago
28 international fund schemes halt existing SIPs on RBI limits
Imagine you put a little bit of money into a piggy bank every month — that is called a SIP.
Some piggy banks give money to companies in other countries, and they are called international funds.
The Reserve Bank of India, the country's central bank, has put a limit on how much money all these piggy banks can send out of India together.
That limit is about 7 billion dollars, and it has not changed since 2022.
Now many fund houses have run out of room under the limit, so they must stop taking new monthly deposits for international funds.
Twenty-eight such schemes have stopped accepting existing SIP instalments.
The money already invested is safe and stays invested.
Investors can keep their units, redeem them, or switch to another scheme.
If the limits open up again, the paused SIPs can restart.
A total of 28 international mutual fund schemes have stopped accepting existing SIP instalments, according to Value Research data reported on 7 August.
PGIM India halts existing SIPs in three schemes from 8 August, while Edelweiss stops SIPs in six schemes from 12 August.
Edelweiss MD & CEO Radhika Gupta said the fund house had “no choice” due to RBI limits on overseas investments, stressing SIPs are paused, not cancelled, and may restart if limits open up.
The restrictions stem from an industry-wide overseas investment limit of about $7 billion, unchanged since early 2022, and a separate ceiling of about $1 billion per fund house.
Existing units remain invested — investors can hold, redeem or switch — while 19 schemes had already stopped SIPs, including funds from Invesco, Motilal Oswal, Axis, Kotak, HDFC and Mirae Asset; Baroda BNP Paribas Aqua FoF is the only fund accepting fresh SIPs.
- Who
- Indian mutual fund houses such as PGIM India and Edelweiss, plus investors running SIPs in international funds; Edelweiss MD & CEO Radhika Gupta commented on the move.
- What
- 28 international mutual fund schemes have stopped accepting existing SIP instalments because of RBI limits on overseas investments; the nine latest affected schemes are from PGIM India and Edelweiss.
- Where
- India.
- When
- Reported on 7 August; PGIM India's halt takes effect from 8 August and Edelweiss's from 12 August.
- Why
- Regulatory overseas investment limits: an industry-wide ceiling of about $7 billion (unchanged since early 2022) and a per-AMC ceiling of about $1 billion leave fund houses with no room to deploy more money abroad.
Key facts
- Total schemes with stopped SIPs
- 28
- Newly affected schemes
- 9 (3 by PGIM India, 6 by Edelweiss)
- PGIM India SIP halt date
- 8 August
- Edelweiss SIP halt date
- 12 August
- Industry-wide overseas investment limit
- About $7 billion (unchanged since early 2022)
- Per-AMC overseas investment limit
- About $1 billion
- Schemes still running existing SIPs
- About 40
- Only fund accepting fresh SIPs
- Baroda BNP Paribas Aqua FoF
Quotes
Radhika Gupta
MD & CEO of Edelweiss Mutual Fund
“Edelweiss has only paused SIPs and not cancelled them, but we had no choice due to RBI limits on overseas investments, we will restart if the limits open up.”
livemint.com
Sources
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