SEBI Proposes Introduction Of Gift Cards For Mutual Fund Subscriptions To Boost Investor Participation

The Securities and Exchange Board of India (SEBI) has proposed allowing Gift Card and Gift Prepaid Payment Instruments (PPIs) to be used for subscribing to mutual fund units.

In a consultation paper dated 23 March 2026, it stated that “Gift Card/ Gift PPI is expected to improve financial inclusion through onboarding of new investors in the mutual fund space.”

SEBI explained that a purchaser can gift a Gift Card or Gift PPI to a recipient, who can then use it to subscribe to mutual fund units. SEBI said the flow of funds will follow Reserve Bank of India guidelines, while the subscription process will comply with SEBI regulations. It proposes that each Gift PPI will have a maximum value of Rs. 10,000, cannot be cashed out or transferred, and will remain valid for one year.

The paper also recommends additional safeguards, including third-party validation checks, compliance with the no third-party payment norm, limits on investment amounts, mandatory use of the full PPI value for subscription, and refund of the amount if the instrument is unclaimed after the validity period.

SEBI has invited public comments on the proposal to be submitted by 14 April 2026.