HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit Trust of I n d i a , a t t h e i n i t i a t i v e o f t h e G o v e r n m e n t o f I n d i a a n d R e s e r v e B a n k . T h o u g h t h e growth was slow, but it accelerated from the year 1987 when non-UTI players enteredthe Industry. In the past decade, Indian mutual fund industry had seen a dramatic improvement, bothqualities wise as well as quantity wise. Before, the monopoly of the market had seen anending phase:the Assets Under Management (AUM) was Rs67 billion. The private sector entry to the fund family raised the Aum to Rs. 470 billion in March 1993 and tillApril 2004; it reached the height if Rs. 1540 billion. The Mutual Fund Industry is obviously growing at a tremendous space with the mutualfund industry can be broadly put into four phases according to the development of thesector. Each phase is briefly described as under.

First Phase 1964-87:Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the Reserve Bank of India and functioned under the Regulatory and administrative controlo f t h e R e s e r v e B a n k o f I n d i a . In 1978 UTI was de -linked from the RBI and the I n d u s t r i a l D e v e l o p m e n t B a n k o f I n d i a ( I D B I ) t o o k o v e r t h e r e g u l a t o r y a n d administrative control in place of RBI. The first scheme launched by UTI was Unit