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News Topical, Digital Desk : A relief decision has been taken for mutual fund investors in the SEBI board meeting. Now the maximum exit load on premature withdrawal of money from the mutual fund scheme has been reduced from 5% to 3%. This will directly benefit those investors who sometimes have to redeem funds midway according to market conditions or their needs. This step is considered important in the direction of reducing costs for investors and making the mutual fund market more attractive.
According to the new rule, earlier the maximum exit load in mutual funds was up to 5 percent, which has now been reduced to 3 percent. This change will be applicable to all mutual fund schemes. This will reduce the redemption cost for investors and investment in mutual funds will become more attractive. Also, liquidity will also increase in the market as investors will now be able to withdraw money easily.
Impact of the decision on the market The effect of this change will be seen on both India and the stock market. In India, the trust of small and medium investors in mutual funds will be strengthened and the capital will move from savings to investment. This will also increase participation in the domestic financial market. On the other hand, the entry of new investors in the mutual fund industry in the stock market may increase and the AUM (Assets Under Management) of fund houses will be positively affected in the long term. Overall, this decision will prove to support both stability and liquidity in the stock market.
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