Ask Our Experts – March 2023

Investment queries

Can government employees invest in stock market? Are there any restrictions? I wish to invest for long term basis so do I require any approval from higher authorities?

-Vinay S, Kannur

Government employees are allowed to invest in shares but speculation/day trading is not allowed, with certain disclosure conditions as given in the service rules. Accordingly, if total transactions in shares, stocks, debentures, or mutual funds throughout the calendar year equal or exceed six months’ basic pay, all government employees are required to send an intimation. We would suggest you refer to the service rules as applicable to you.

Three days back I redeemed some MF and the Income Distribution cum Capital Withdrawal (IDCW) declared on the same day, because of which I lost a huge amount, I want to recover some. Please help me.

– Vijay Raghavendra, Bengaluru

The IDCW payouts are subject to notice by the AMCs, and one might have to track the IDCW declarations and take investment decisions.

Having said that, please note, most mutual fund schemes have 2 options – Growth and IDCW. Investors who look for income payouts from the scheme, usually opt for the IDCW option. But one should remember that the income is paid from the capital appreciation (or as the case may be) and it is not an additional benefit. Also, the quantum or the periodicity of the payout declared, is as per the discretion of the fund manager. Scheme’s NAV would correspondingly be adjusted (come down) in line with the IDCW payout value. If suitable, you may also look at investing in Growth option of a scheme and redeem the units, matching your fund requirements, as and when they arise.

I have been investing in 7 Mutual funds through monthly SIP. But unfortunately, auto debit in a few funds were discontinued due to insufficient funds in my account at that time. Now I wish to continue or start new ones. What can I do.

John M George, Delhi

Normally SIPs get automatically cancelled in case of insufficient fund after three consecutive instalments. Please confirm with the respective AMC(s) or your investment advisor, whether your SIPs are active or has been cancelled. If it’s cancelled, you can re-start the same by submitting fresh requests in physical form or through AMCs or your investment advisor portals, online.

I am an NRI and we plan to invest some funds regularly through mutual funds and shares in India. Is it possible? What is the procedure? Kindly advise.
-Gopakumar A, Brisbane, Australia.

You can invest in shares/mutual funds in India in NRI status as per Reserve Bank of India (RBI) norms. There are account opening procedures to be done to start investing in shares. Initially one needs to complete the KYC (Know Your Customer) registration and then open a PIS (Portfolio Investment Scheme) account with any bank that is authorized by the RBI to manage and route the investments. You can contact any SEBI registered broker to complete the account opening formalities like KYC registration, PIS account opening etc.

Investing in mutual funds is fairly simpler, once the KYC is registered, one can start investing in the mutual fund schemes as per your investment objective and goals, from the NRI bank accounts.

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