T-30 and B-30

Mutual fund money in India is concentrated. The T-30 locations — the top 30 cities from which mutual fund investments are made — account for more than 80 percent of industry AUM. B-30 is everything beyond the top 30.

SEBI wants the industry to reach the rest of the country, so it lets mutual funds spend more to bring in B-30 money: distributors who mobilise funds from investors in B-30 locations earn higher commission, and the incentive structure now also rewards onboarding women investors from both T-30 and B-30 cities.

That creates a very practical question for every single purchase: which bucket does it belong to? Answering it is the RTA's job, and it is done by a published, mechanical procedure — not by the distributor's say-so.

The Top 30 cities are taken from AMFI data on "AUM by Geography – Consolidated Data for Mutual Fund Industry" as at the end of the previous financial year. For the additional expense, SEBI treats inflows of up to Rs 2,00,000 per transaction by individual investors as inflows from a "retail investor", and the additional TER is charged on retail inflows from B-30 cities.

AMFI, in consultation with SEBI, issued a uniform tagging procedure effective 1 April 2019. Its core rules:

1. Tagging is based on the investor's PIN code in the folio.
2. RTAs use AMFI's city-wise PIN code file for the top 200 cities to tag all purchases, including switches, SIP/STP and IDCW reinvestments.
3. NRI transactions (tax status NRI, OCI, PIO, FII, QFI) are tagged T-30, as is any transaction where the country in the form or KRA/CKYC record is not India.
4. PIN matches the T-30 file → T-30.
5. PIN valid but not in the T-30 file → T-30 if the KYC city is a T-30 or foreign city; otherwise B-30, including where the KYC city field is blank.
6. PIN invalid or missing → B-30 only if the city can be positively identified as B-30; otherwise T-30.
7. Re-tagging at T+15 business days where the original tag came from the fresh purchase form and the KRA/CKYC download shows a change, with dates stored for audit trail.

AMFI reviews the PIN and city masters once a year, and revisions apply prospectively. The additional commission for new B-30 investors and women investors is paid in lumpsum and SIP modes, provided the investor stays invested at least one year, from the 2 basis points of daily net assets AMCs set apart for investor education, with claw back.

Illustrative transactions. City status is described generically because the T-30 list is AMFI data that changes each year.

An RTA processes four purchases in one equity scheme on the same day:

Only Mr Hegde's Rs 1,80,000 is a retail inflow from B-30 for the additional-expense rule. Mr Lal is still tagged B-30 for the AUM by Geography report, but his transaction exceeds the per-transaction retail limit.

Now suppose Mr Hegde's tag came from his fresh purchase form, and the KRA download ten days later shows a PIN that is in the T-30 file. The RTA re-tags at T+15 business days as T-30 and stores both the tagging and re-tagging dates for audit trail — the inflow no longer counts as B-30.

Chapter 8 (Basics of Mutual Funds) explains T-30 and B-30 under expenses and lists the twelve-step AMFI tagging procedure verbatim; its sample questions ask which locations earn higher commission (B-30; higher) and what the AUM by Geography report is based on (the investor's PIN code). Chapter 14 (Financial Transactions) returns to it in the RTA's role in commission — determining whether a transaction is sourced from T-30 or B-30 — and the incentive for new B-30 and women investors.

• Tagging is by the investor's PIN code in the folio — not Aadhaar, not the bank branch, not the AMC's or distributor's city.
• NRI transactions are always T-30, whatever address they carry.
• When the city cannot be positively identified as B-30, the default is T-30. The rule leans against paying the incentive on doubtful data.
• Retail means up to Rs 2,00,000 per transaction by an individual, not per year and not per folio.
• T-30 is based on AUM by geography at the end of the previous financial year, and AMFI revisions apply prospectively.
• Re-tagging is at T+15 business days, triggered by a KRA/CKYC download that differs from the fresh purchase form.
• The women-investor incentive covers T-30 and B-30 cities; the new-investor incentive covers B-30 only.
• Switches, SIP/STP instalments and IDCW reinvestments are tagged — they are purchase transactions.