Mutual funds industry in India

The origin of the investment funds industry in India with the introduction of the concept of mutual funds of UTI in 1963. Although growth was slow, but it has accelerated since the year 1987, when non-UTI players in the industry.

saw in the last ten years, Indian mutual fund industry a dramatic improvement in the quality and quantity as basis. Before, the monopoly of the market has experienced a period end, was Assets under management (AUM) Rs.67bn. input of the private sector to fund family rose the AUM to Rs 470 billion from March 1993 to April 2004 he reached the height of 1.54 billion euros.

The AUM of the Indian mutual fund industry is the putting In comparison, the sum of it solely from the filing of SBI, make less than 11% of the total deposits held by Indian banks.

The main reason for the low growth of the industry is that mutual funds in India in the new country. Large parts of the Indian investor is still not intellectuate with the concept. It is therefore the responsibility of all companies of investment funds, market the product information is correct from the sale.

The main target was too small to attract investors and has been made possible through the joint efforts of the Government of India and the Reserve Bank of India. The industrial history of mutual funds in India is divided into the following phases are better understood:

Phase 1 Education and development of trust units of India -. 1964-1987

Unit Trust of India enjoyed complete monopoly when it was in 1963 by an Act of Parliament established UTI was put through. RBI has and continues to operate under the regulatory control of RBI to 1978, then its control has been transferred
Industrial Development Bank of India (IDBI). UTI launched its first project in 1964 called system of units in 1964 (U.S. 64), which has attracted many investors.

UTI has launched more innovative programs in the 1970s and 80s to life, to meet the needs of different investors. It started in 1971 and Ulip schemes introduced six more between 1981-84.

Phase 2 Entry of public sector funds – 1987-1993

The Indian mutual fund industry witnessed a number of public sector actors in the market for 1987. In November 1987, SBI Mutual Fund of India State Bank with the first non-UTI India Fund. SBI Mutual Fund later followed by the Funds Mutual Bank, LIC Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund, GIC Mutual Fund PNB Mutual Fund. In 1993, the industry’s assets under management has increased seven times to Rs 47 004 crore. However, UTI remains the market leader with around 80% market share.

.

1992-1993

Height mobilized

Assets under management

mobilization% of the gross domestic product savings

> ICU

/

11 057

38 247

<5.2% / p> public

0.9%

Total

47 004

<<6.1% / p> / p> Phase 3 The emergence of private sector investment – 1993-96

The permission given private funds, including foreign fund managers (most of them come from the joint venture with the Indian promoters) for the industry, the Investment Funds in into force in 1993, has provided a wide range of choices for investors and more competition in the industry. private funds have introduced innovative products, investment techniques and technology services for investors. In the years 1994-95, began about 11 private funds their programs.

Step 4 SEBI regulations and growth – 1996-2004

Industry Investment Fund and a much stronger regulation of SEBI grown 1996.Le years fundraising and the number of players in the industry reached the height of the new investors have begun to more to show interest in investment funds.

investors are protected interesting SEBI and the government has offered tax advantages for investors. SEBI (Mutual Funds) Regulations 1996 was introduced by SEBI for uniform standards for all mutual funds in India. The budget of the Union in 1999, excluding all income from dividends had investors from taxes on income.

Step 5 Consolidation and growth – from 2004

The industry also has several mergers and acquisitions recently witnessed examples of the acquisition plans of the Alliance mutual funds from Birla Sun Life is so F & C Mutual Fund Investment Fund and PNB Mutual Fund by capital. At the same time, most international investment fund players India Fidelity, Franklin Templeton funds, etc. is entered, there were 29 funds at the end of March 2006. This is a continuous phase of industry growth through consolidation and the entry of new international actors and the private sector.

Mutual Funds