History of Mutual funds in India

History of Mutual Fund


History of Mutual fund in India

History of Mutual fundMutual funds started in Europe at the end of the seventeenth century, but after the independence of the India Mutual Fund, the UTI (Unit Trust of India) in 1963 with a joint effort of the Government of India and the RBI (Reserve Bank of India). Started with the installation of.

In this way, the beginning of the Mutual Fund in India has been almost 55-years since 1963, and about how the Mutual Fund evolved in this 55 year long period, today we will talk about this topic in the History of mutual fund Is going to understand.


Before knowing the history of Mutual Fund, another question that comes to mind - after all, what was the main reason behind the introduction of Mutual Fund in India by RBI and the Government of India?

So friends, the main objective of the Government of India and the RBI behind the introduction of Mutual Fund was to accelerate the economic development by investing the money of the general public in stock market investment.

Since the inception of the Mutual Fund, the general public, who has a small amount of money to invest, and the general public have little knowledge and facilities of the stock market investment. With the help of such mutual funds, the general public, whose number is in crores, could be collected from them in the form of small investments and made a stock market investment together.

And thus, on one hand, the general public got the benefit of stock market investment with the help of MUTUAL FUND, and on the other hand, companies were going to get more capital to increase their business. And thus Mutual Fund was started in India with the objective of increasing the pace of economic development of India.


The history of mutual funds in India can be divided into four parts,

First part - 1964 to 1987

Second part - 1987 to 1993

Third part - 1993 to 2003

Fourth part - After 2003

Let us try to understand these parts in a little detail,

First Part - 1963 to 1987 - Establishment and Development of UTI

Unit Trust of India (UTI), India's first mutual fund, was established by the Parliament Act in the year 1963.

The first Mutual Fund Scheme by UTI came in the year 1964, named as Unit Scheme 1964, after that between 1970 and 1980, UTI also started many other schemes to different investors according to their need, Chief among which was Unit Linked Insurance Plan (ULIP).

It is to be noted that the funds deposited by Mutual Fund Investors with UTI which were raised in 1984, 600 crores, by 1987-88 it had increased more than 10 times to 6700 crores.

The second part - 1987 to 1993 - Public Sector Bank's entry into Mutual Fund

UTI is the only Mutual Fund Institute in India till the year 1987, but in the same year Government of India also allowed Public Sector Bank to introduce Mutual Fund Scheme.

And in this way, many banks and institutions have introduced mutual fund schemes in the mutual fund, among which the most prominent banks and institutions are -

  • Insurance Corporation of India (LIC)
  • General Insurance Corporation of India (GIC)
  • SBI Mutual Fund
  • Can bank Mutual Fund (Dec 1987)
  • Punjab National Bank Mutual Fund (Aug 1989)
  • Indian Bank Mutual Fund (Nov 89)
  • Bank of India (Jun 1990)
In this way, after 1987, the total deposits of investors with different mutual fund institutions had increased from 6700 to more than 47000 crores by 1993.

Third part - 1993 to 2003 - MUTUAL FUND entry to the private sector

If we talk about the HISTORY of MUTUAL FUND, in the year 1993, a new era of Mutual Fund started in India. Because UNDER of all Mutual Institutions UTI was working before this, but SEBI was established in India in 1993, and after the establishment of SEBI, now all the organizations had to follow the rules of SEBI.

MUTUAL FUND REGULATION 1993 brought by SEBI to Mutual Fund Institutions for the purpose of development and regulation in an ORGANISED manner, And private sector institutions also got permission to bring Mutual Fund Scheme.

This act of 1993 was amended again and later in 1996 came MUTUAL FUND REGULATION 1996. If we talk about the business of mutual fund institutions, by the end of the year 2003, a total of 33 mutual fund institutions were working, whose turnover had crossed 1 lakh 22 thousand crores.

Fourth part - After 2003

In the year 2003, UTI was reduced to two parts, one part which was working UNDER of Government of India, which had a total amount of about 30 thousand crores, And the second part was being run by SBI, PNB, BOB, whose total amount had gone above 76 thousand crores.

And thus the mutual fund has developed a lot due to the promotion and awareness programs conducted by the mutual fund organizations, and by 2015 the total turnover of the mutual fund institutions has gone up to 10 lakh crores.

And in the last two years, the amount invested in India has grown even faster.

Friends, today we talked about the HISTORY of MUTUAL FUND IN INDIA in the series of Mutual Funds, now we will talk in the next section - Benefits of Mutual Funds.

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