SBI Will No Longer Charge Transaction Fee on Mutual Funds

State Bank of India (SBI) will not charge any transaction fee on mutual funds. Market regulator, SEBI has recently introduced transaction fee on selling mutual fund schemes to investors.

Earlier, SBI used to sell mutual funds by levying a charge on transaction fee of Rs.100 on existing mutual fund investors and Rs.150 on first-time investors. Due to inconvenience in fee collection, it is decided not to charge such fee any longer. It seems, other banks that selling mutual fund schemes may also follow suit.

Usually, transaction fee is imposed by distributors and charged above the advisory charge. The national distributor said that it is inconvenience to make a collection of Rs.100 from an institutional investor who has invested Rs.10 crore, which in turn becoming a difficult task to make an accounting entry of this transaction.