The Securities and Exchange Board of India (SEBI) has extended the deadline for investors in mutual funds who do not hold PAN cards up till December 31, this year.
However, the regulator said investors will have to apply for a PAN card and submit proof of the application while filling in the investment form for mutual funds from July 2 onwards.
SEBI has informed this in a letter to The Association of Mutual Funds in India (AMFI).
Earlier, AMFI had asked SEBI to re consider the decision of having a PAN card compulsorily for investments in mutual funds as it would take away a large number of investors from mutual funds.
"From July 2, the investor has to either submit a PAN card number or a proof of application for a PAN card, failing which, he will be unable to invest in mutual funds. SEBI has intimated the same to AMFI," said Mr A.P. Kurian, Chairman, AMFI.
The underlying idea is to make all investors in securities market to get a PAN card.
However, Mr Kurian raised concerns that the same procedure was not uniform across all avenues of investments such as post office deposits, national savings certificates, premia in insurance, among others where only the investor above Rs 50,000 has to get a PAN card.
Mr Kurian said it would take time to educate investors in mutual funds who are now present in small towns also.
"Facilities will also have to be provided in these places to provide a PAN card," he added.
"The momentum of investment may be affected which is a concern," said Mr Kurian.