Uti Ulip

industry mutual funds in India
Sector mutual funds in India

The origin of the mutual fund industry investment in India with the introduction of the concept of mutual fund by UTI in the year 1963. Although growth was slow, but accelerated from the year 1987 when non-UTI players entered the industry.

In the last decade, Indian industry to mutual funds had seen a dramatic improvement in both quality wise and quantity wise. Before, the monopoly of the market experienced a late phase, assets under management (AUM) was Rs.67bn. the entry of private sector fund family rose the AUM to Rs 470 billion euros in March 1993 to April 2004, he reached the height of 1.540 billion euros.

Putting the AUM of the Indian industry of mutual funds in comparison, the total of it is below the filing of SBI alone, constitute less than 11% of total deposits held by Indian banks.

The main reason for its low growth, the industry is that mutual funds in India is new in the country. Large sections of Indian investors are not yet intellectuate with the concept. Therefore, it is the responsibility of all fund companies, mutual funds, market the product properly informed of the sale.

The main objective at that time was to attract small investors and it has been made possible through the collective efforts of the Government of India and the Reserve Bank of India. The industrial history of mutual funds in India can be better understood divided into the following phases:

Phase 1. Establishment and growth of trust units of India - 1964-87.

Unit Trust of India enjoyed complete monopoly when it was established in the year 1963 by an Act of Parliament. UTI was set up by RBI and has continued to operate under the regulatory control of the RBI till 1978, then its control has been transferred to Industrial
Development Bank of India (IDBI). UTI launched its first project in 1964, designated as unit scheme 1964 (U.S. 64), which has attracted many investors.

UTI launched the most innovative projects in the 1970s and 80s to meet the needs of different investors. It launched in 1971 and ULIP plans submitted six more between 1981-84.

Phase 2. Entry of public sector funds - 1987-1993

        The industry of Indian mutual funds experienced a number of public sector actors entering the market in the year 1987. in November 1987, SBI Mutual Fund of the state of India the Bank became the first mutual fund non-UTI India. SBI Mutual Fund followed later by the Fund may mutual bank, LIC Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Funds, GICs and mutual funds mutual funds GNP investment. In 1993, assets under management of the industry has increased seven times in the RS. 47,004 crores. However, the ICU remained the leader with about 80% market share.

.

1992-93

Amount Mobilized

AUM

Mobilizing% of gross domestic savings

UTI

11,057

38,247

5.2%

Public sector

1964

8757

0.9%

Total

13,021

47,004

6.1%

Phase 3. The emergence of private sector funds - 1993-96

The permission given to private sector funds including foreign companies managing funds (most of them come through joint ventures with developers in India) to enter the mutual fund industry in 1993 provided a wide range of choice for investors and more competition in the industry. private funds have introduced innovative products, technical investment and technology investor servicing. In 1994-95, about 11 private sector funds have launched their programs.

Phase 4. Growth and SEBI regulations - 1996-2004

The industry of mutual funds experienced a robust growth and tighter regulation of SEBI.