With more than 18 crore investors in the Indian market from previous records of only a few lakhs during the 1980’s and an AUM of 50,00,000 crore by November of 2023, Mutual fund has grown to be a common household name and wealth multiplier. Here is what we need to know about its roots and origins.
- Why did it start? Who initiated this?
The plan to prompt the citizens of India and Indian business and corporations to uplift the economy of its nation and to personally save and grow their wealth, the RBI and Government of India launched India’s first Mutual fund named “Unit Trust of India ” in 1963. Successfully, this mutual fund scheme generated ₹6,700 crore AUM by the late 1980’s.
- Start of Public Sector Mutual Funds
Seeing the vigor of investors, the public sector banks entered the field of mutual fund finance by late 1987’s, SBI being the first public bank to retort to this scheme on June 1987, followed by Canbank mutual funds by December of 1987, LIC , Punjab national Bank and Indian Bank by 1989 and Bank of India by 1990. Successfully, they increased the AUM by ₹47,000 crores by the early 1990’s.
Witnessing entry of Public sectors, a committee named as Securities and Exchange Board of India (SEBI) was setup in 1992 to establish laws and regulations for the screenings of such schemes.
- Milestones Achieved Currently
The Mutual Funds Industry runs with an AUM of ₹ 50 trillion as of November 2023 as compared to ₹25 Trillion in 2018. An increase of 2 times the value of AUM was witnessed during this 5 years along with thrice the number of investors to 17 crores from 8 crores within the same timeline. Additionally, 14 lakh new folios are being added each month progressively within these years.
