The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank of India. Significant growth in size of mutual fund industry was seen in late 1980’s when public sector mutual funds were given permission. The entry of private sector players in mid 1990s and formulation of comprehensive SEBI MF Regulations 1996 led to sharp growth in the assets of the mutual fund industry. In the last ten years, entry of banks and institutional players as intermediaries coupled with greater investor awareness and penetration has led to significant growth in assets of Indian Mutual Fund industry.

1. The significant growth in assets of
Indian Mutual Fund industry

2. First Phase (1964-1987)
Second Phase (1987-1993)
Third Phase (1993-2003)
Fourth Phase (2003-till date)

3. Unit Trust of India (UTI) was established in
1963 by an Act of Parliament
The first scheme launched by UTI was Unit
Scheme 1964
At the end of 1988 UTI had Rs.6,700
crores of assets under management

4.  This phase showed the entry of Public Sector
Funds
 SBI Mutual Fund was the first non- UTI Mutual
Fund established in June 1987 followed by banks
 LIC and GIC established their mutual funds in June
1989 and December 1990 respectively
 At the end of 1993, the mutual fund industry had
assets under management of Rs.47,004 crores

5.  The Private Sector Funds entered the Indian
mutual fund industry in 1993
 According to Mutual Fund Regulations all mutual
funds except UTI were to be registered
 Kothari Pioneer (now merged with Franklin
Templeton) was the first private sector mutual fund
registered in July 1993
 By 2003, there were 33 mutual funds with total
assets of Rs. 1,21,805 crores, whereas the Unit
Trust of India had assets of Rs.44,541
crores, staying as the largest mutual fund in this
phase

6.  In 2003, UTI was bifurcated into two separate
entities –
• Specified Undertaking of UTI - representing the assets of US 64 scheme
• UTI Mutual Fund Ltd - sponsored by the Public Sectors
 Consistency in performance by top mutual funds
and other major factors has contributed to growth in
mutual fund assets
 At the end of December 2012, the average assets
of Indian mutual fund industry amounted to Rs
7,86,543 crores

8.  Asset Under Management of the Indian Mutual
Funds Industry, if compared, constitute less than
11% of the total deposits held by the Indian
banking industry, less than SBI alone.
 Reason of its poor growth is that the mutual fund
industry in India is new here. Large sections of
Indian investors are yet to be intellectuated with
the concept.
 Hence, it is the prime responsibility of all mutual
fund companies, to market the product correctly
abreast of selling.

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