Maharashtra allows temples, charities to invest 50% of corpus in mutual funds, bonds

Maharashtra’s iconic temples and charitable trusts could soon become active investors in India’s financial markets. With a sweeping reform effective July 21, 2025, Maharashtra state government has opened the gates for public trusts to allocate up to 50 per cent of their corpus in mutual funds and market-linked securities.

For decades, public trusts — be it religious institutions, social welfare organisations, or educational charities—were largely confined to traditional instruments such as fixed deposits and post office schemes. Any deviation into riskier assets required cumbersome, case-by-case permissions from the Charity Commissioner but that changes now.

Maharashtra’s Big Leap into Market-Linked Investments

The Charity Commissioner of Maharashtra has issued a general order that enables trusts to diversify their investment portfolios without seeking individual approvals. This progressive move aligns trust fund management practices with contemporary investment strategies, providing them the ability to pursue capital appreciation while maintaining compliance oversight.

Under the new directive, public trusts can now invest in:

• Mutual Funds with at least 65 per cent equity exposure
• Debt mutual funds regulated by SEBI
• ETFs tracking indices like the BSE Sensex and NSE Nifty
• Government and corporate debt securities (minimum 3-year maturity)
• Shares of companies with a market capitalization of Rs 5,000 crore or more

While the policy adds flexibility, it retains a strong focus on risk management. Eligible securities must hold a minimum AA rating from at least two SEBI-registered credit rating agencies. In cases where multiple ratings exist, the two lowest will be considered, ensuring trusts remain shielded from higher credit risk instruments.

Unlocking Billions in Idle Capital

According to data from the Office of Charity Commissioner, Maharashtra State, 59,143 public trusts are registered in the state. While official figures on their collective corpus are unavailable, market observers suggest that these entities collectively manage funds running into several thousand crores of rupees.

As per some estimates by experts the reform could potentially unlock Rs 5,000-10,000 crore in investable assets over time.

This move provides a fresh and sizable investor base for mutual funds, ETFs, and debt markets.

Will Other States Follow?

This shift has the potential to reshape how charitable capital is managed, making it more efficient and aligned with modern financial strategies, while still adhering to prudent risk norms.

This landmark policy change by Maharashtra could be a turning point for public trusts, blending traditional philanthropy with contemporary asset management. With regulatory clarity, risk controls, and market access now in place, charitable trusts in the state can pursue balanced investment strategies that align growth with safety.

As Maharashtra takes the lead, the rest of India’s states may soon follow. The confluence of faith and finance could just be the next big theme in India’s capital markets.