Evolution of Mutual Funds in India
ž Phase I – ( 1964 – 1987)- Growth of UTI
UTI sole player in the industry, created by an Act of Parliament ,1963
UTI launches first product Unit Scheme 1964
UTI creates products such as MIP's, children plans ,offshore funds etc
MASTERSHARE – Ist Diversified Equity Investment Scheme in India.
INDIA Fund – Ist indian offshore fund lauched in August 1996.
ž Phase 2 – ( 1987 – 1993)- Entry of Public Sector Funds
In 1987 Public Sector Banks and FI's got permission to set up MF.
SBI mutual fund was the first non -UTI mutual fund
In 1993, Mutual Fund Industry was open to private players.
SEBI got its regulatory powers in 1992
o Phase 3 – ( 1993-1996) – Emergence of Private Funds
In 1993, Mutual Fund Industry was open to private players.
SEBI's first set of regulations for the industry formulated in 1993
Significant innovations, mostly initiated by private players
o Phase 4 – ( 1996-1999) – Growth and SEBI Regulation
Implementation of new SEBI regulations led to rapid growth
Bank mutual funds were recast as per SEBI guidelines
UTI came under voluntary SEBI supervision.
Dividends made tax free in 1999.
Mutual funds assets in mid-2002 were appx. 1,00,000 crores.
AUM by end of 2004 appx. INR 153,000 crores
During this phase, both SEBI and AMFI launched investor awareness programmes.
o Phase 5 – (1999-2004) – Emergence of a large and uniform industry
UTI Act Repealed in February 2003.
UTI mutual fund came under SEBI’s regulations 1996.
Rapid growth, significant increase in corpus of private players
Tax break offered created arbitrage opportunities
Bond funds and liquid funds registered highest growth
o Phase 6 – From 2004 onwards : Consolidation and Growth
Mergers and Acquisitions witnessed
Alliance MF acquired by Birla Sunlife
Sun F&C by Principal PNB Mutual fund.
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