Mutual fund house Peerless Mutual Fund has started the option of cash investment to tap the un-banked customers in retail mutual fund schemes through select Allahabad Bank branches.

This initiative is in accordance with Sebi's guidelines of allowing cash investments by investors up to Rs 20,000 per investor, per mutual fund every financial year.

"We aim to cater to the un-banked customers in tier-III and tier-IV locations through this facility.

"Allahabad Bank has a strong presence in these markets and synergy of both organisations will help customers, who wish to take advantage of the growing capital markets through our schemes," Managing Director and Chief Executive Officer of the Peerless Funds Management Company, Akshay Gupta said in a release.

The cash purchase facility is available immediately at select Allahabad Bank branches and will be further extended gradually to 2,500 branches across the country, he added.

According to the company, the combination of cash investments coupled with non-requirement of PAN for such investors will widen the reach of mutual funds among semi-urban and rural segments.