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Evolution of the mutual fund industry in India :
The story of the mutual fund industry in India began in 1963 when Unit
Trust of India came into being. The history of mutual funds in India can
be divided into the following phases.

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First phase - 1964 to 1987
Unit Trust of India (UTI) was set up by the Reserve Bank of India. The
Industrial Development Bank of India (IDBI) took over UTI in 1978. UTI
launched its first scheme in 1964 and had Rs.6,700 crores of assets
under management in 1988.

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Second Phase - 1987 to 1993

In 1987, public sector mutual funds entered the fray, the first entrant
being the SBI Mutual Fund (non-UTI mutual fund).
The Canbank Mutual Fund, Indian Bank Mutual Fund and Bank of
Baroda Mutual Fund were established in 1987, 1989 and 1992
respectively.
The mutual funds industry had Rs. 47,004 crore assets under
management in 1993.

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Third Phase - 1993-2003

In 1993, Kothari Pioneer (subsequently merged with Franklin

Templeton) became the first private sector mutual fund to be registered.
A comprehensive SEBI Mutual Fund Regulations were formulated in
1996 which is currently being followed.
Several foreign mutual funds set up funds in India in late 90s.
There were around 33 mutual funds with Rs.1,21,805 crore assets in
2003.

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Fourth Phase - since February 2003

UTI was bifurcated into two entities after the repeal of the Unit Trust of
India Act in 2003.
The Specified Undertaking of the Unit Trust of India does not fall under
within the ambit of mutual fund regulations.
The UTI Mutual Fund, however, comes under the purview of Mutual
Fund Regulations and is registered with SEBI.
According to experts, the division of the erstwhile UTI (AUM of
Rs.76,000 crores as on March 2000) coupled with various mergers of
private sector funds, heralded a new chapter in the story of the the
mutual fund industry.

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Fifth Phase

From 2004 onwards, the mutual Fund industry entered a phase of

consolidation and growth with courtesy various mergers and
acquisitions.
Acquisition of Allianz Mutual Fund schemes by Birla Sun Life, in the
recent past is a case in point.
According to latest reports, major international fund houses such as
Fidelity want to strengthen their presence in India.

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