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  • Neetika Gupta

The popularity graph & history of Indian MF industry

Know complete history of Indian Mutual Fund Industry

Given below is the brief History of the Mutual Fund Industry in India


The mutual fund industry in India traces its roots back to 1963 when the Unit Trust of India (UTI) was established under the initiative of the Government of India and the Reserve Bank of India. Over the years, the industry has experienced significant developments, which can be divided into four distinct phases.

First Phase - 1964-1987:

The UTI was founded in 1963 through an Act of Parliament and initially operated under the regulatory control of the Reserve Bank of India. However, in 1978, it was de-linked from the RBI, and the Industrial Development Bank of India (IDBI) assumed the regulatory and administrative control. The first scheme launched by UTI was Unit Scheme 1964. By the end of 1988, UTI managed assets worth Rs. 6,700 crores.

Second Phase - 1987-1993 (Entry of Public Sector Funds):

In 1987, the mutual fund industry witnessed the entry of non-UTI, public sector mutual funds established by public sector banks, as well as the Life Insurance Corporation of India (LIC) and the General Insurance Corporation of India (GIC). SBI Mutual Fund became the first non-UTI mutual fund in June 1987, followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), and Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989, while GIC set up its mutual fund in December 1990. By the end of 1993, the industry's assets under management reached Rs. 47,004 crores.

Third Phase - 1993-2003 (Entry of Private Sector Funds):

The entry of private sector funds in 1993 marked a new era for the Indian mutual fund industry, offering investors a wider choice of fund families. This phase also saw the introduction of the first Mutual Fund Regulations in 1993, which mandated the registration and governance of all mutual funds, excluding UTI. The first private sector mutual fund registered under these regulations was Kothari Pioneer (now merged with Franklin Templeton) in July 1993. The 1993 SEBI (Mutual Fund) Regulations were subsequently replaced by the more comprehensive and revised Mutual Fund Regulations in 1996, under which the industry currently operates. During this period, the industry witnessed the establishment of various mutual fund houses, including several foreign mutual funds venturing into India. Additionally, the industry experienced mergers and acquisitions. As of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. Among them, UTI remained the leading mutual fund with assets worth Rs. 44,541 crores.

Fourth Phase - since February 2003:

In February 2003, the Unit Trust of India Act 1963 was repealed, leading to the bifurcation of UTI into two separate entities. The first entity, known as the Specified Undertaking of the Unit Trust of India, managed assets worth Rs. 29,835 crores as of January 2003. It primarily represented the assets of the US 64 scheme, assured return, and certain other schemes. This entity operated under an administrator and the rules established by the Government of India, falling outside the purview of the Mutual Fund Regulations. The second entity, UTI Mutual Fund, sponsored by SBI, PNB, BOB, and LIC, was registered with SEBI and functioned under the Mutual Fund

This is an informative blog related to the history of Mutual Funds. You can contact us freely for any help related to Mutual Fund investments :

Infinity Finserv (P) Ltd, 212 Saran Chambers 2, Park Road, Lucknow -226001

Phone : 9307218766 or 0522-4101666/67


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