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Marketing of Mutual Fund units - RRBs



Having a idea of expanding the scope of business of RRBs and considering that marketing of Mutual Fund units provides a profitable avenue for banks, it has been decided to market the mutual funds as agents. Thus, RRBs may, with the approval of their Board of Directors, enter into agreements with Mutual Funds for marketing their units subject to the following terms and conditions :



  • The bank should only act as an agent of the customers, forwarding applications of the investors for purchase / sale of MF units to the Mutual Fund / Registrar Transfer Agents.
  • The purchase of MF units should be at the risk of customers
  • The bank should not obtain such units of Mutual Fund from the secondary market.
  • The bank should not buy back units of Mutual Funds from their customers. Retailing of units of Mutual Funds may be confined to some select branches of the bank to ensure better control.
  • The RRBs should put in place adequate and effective control mechanisms in consultation with their sponsor banks.
Mutual Funds
Mutual Funds