The Idea Of Mutual Fund Essay

733 Words Dec 3rd, 2016 3 Pages
The idea of mutual fund began to take shape in India in 1963 with the set up and enactment of Unit Trust of India (UTI) when the UTI Act, 1963 was framed to operate both as a financial institute and an investment trust. In 1964, the board of trustees formulated an openended scheme and launched it with scale of units begin open in the month of July, 1964 at the nominal value of Rs. 10 each. Thus, the UTI came out with its first open-ended scheme in 1964. During the initial phase of the developments of mutual funds between 1964 and 1987, UTI alone managed the show with five open-ended funds.
The first decade of UTI operations (1964-74) was the formative stage. It introduced UnitLinked Insurance plan (ULIP) in 1971. The period 1974-84 witnessed a state of consolidation and expansion of the UTI. During the period 1984-1987, the Trust launched several new schemes such as Children‟s Gift Growth Fund (1986) and Master Share (1987). The first Indian offshore was brought out. UTI had Rs. 6700 crore of assets under management in 1987-88.
Phase II 1987-1993
The second phase between 1987 and 1992 witnessed the broadening of the base of the industry by the entry of mutual funds sponsored by commercial bank and public sector financial institutions. Followed by the government‟s decision to permit nationalized banks to set up mutual funds, the State Bank of India (1987), Life Insurance Corporation (1989), General Insurance Corporation (1991), Canara Bank (1987), Indian Bank (1990), Bank…

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