Mutual fund houses do not allow you to reduce your monthly commitments midway in existing SIPs. The easiest way to reduce your monthly SIP commitment is by stopping all or a few of them and re-starting a new one, albeit with a lower amount.
Although SIP registrations have become easier and faster than before, it could take a month to stop your existing SIPs. One reason why fund houses do not allow you to reduce the amounts in existing SIPs is the fear of losing business. While they say it could be misused for flimsy reasons, a big reason is that they pay commissions to distributors in advance. Typically, SIP commissions are paid to distributors when an SIP starts; they’re based on the amount committed to be invested every month and the tenure. Now, if you decide to reduce your SIP amount midway, fund houses face the difficult task of recovering the excess commissions from distributors, something that the fund industry insiders say they would rather avoid.