SEBI Reinstates B-30 Incentives for Mutual Funds, Capping Payouts at ₹2,000

The Securities and Exchange Board of India (SEBI) has brought back incentives for mutual fund distributors to encourage investments from towns and cities outside the top 30. As per news reports, this was announced after its board meeting held on September 12, 2025.

Payment Structure

Distributors will be paid 1% of the first application amount for lump sum investments. In the case of systematic investment plans (SIPs), the incentive will be 1% of the total amount invested during the first year. The payment has been capped at ₹2,000 per investor.

Inclusion of Women Investors

SEBI has also extended this framework to include new women investors from top cities. Distributors bringing in women investors with a fresh PAN will be eligible for additional commissions. The calculation and payment method will be the same as the incentives offered for B-30 investors.

Past Framework and Suspension

The earlier model, which remained in place until March 2023, allowed mutual funds to charge up to 30 basis points over and above the expense ratio if part of their assets came from B-30 regions. These benefits were usually passed on to distributors. However, the framework was suspended after SEBI observed cases of misuse, including transaction splitting and churning of investments.

Other Measures Approved

In the same meeting, SEBI also reduced the maximum exit load that mutual fund schemes can levy. The cap has been brought down from 5% to 3%. Exit loads in most schemes currently range between 1% and 2%, and the change is for aligning the regulatory ceiling with prevailing practices.

Read more: SEBI Considers Additional Incentives for First-Time Female Mutual Fund Investors!

Conclusion

The new structure puts tighter controls on distributor incentives while adding provisions for first-time women investors. The regulator’s changes also reduce exit load limits, with the broader plan of improving transparency and participation in the mutual fund industry.

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