Mutual Funds history-of-mfs-india-1963

History of mutual funds in India

From WebNotes, a public knowledge base. Last updated 19 May 2026. Reading time ~4 min.

The Indian mutual fund industry began in 1963 with the establishment of Unit Trust of India (UTI) by an Act of Parliament. UTI operated as the sole mutual fund entity for 24 years until 1987, when SBI Mutual Fund became the first public-sector bank-sponsored AMC. The industry was progressively liberalised through the 1990s and 2000s, with private-sector AMCs entering from 1993 onwards under the SEBI (Mutual Funds) Regulations 1993 and subsequently 1996 .

Eras

1963 to 1987: UTI monopoly

Unit Trust of India: sole mutual fund.
Operated as a public-sector entity.
Iconic schemes including US-64.

1987 to 1993: Public-sector entry

SBI Mutual Fund (1987).
Canara Bank, LIC, Bank of India, others followed.

1993 to 2003: Private-sector liberalisation

SEBI MF Regulations 1993 allowed private-sector AMCs.
Kotak Mahindra, ICICI Prudential, HDFC, others entered.
1996 Regulations refined the framework.

2001: UTI US-64 crisis

US-64 redemption suspension.
Government bailout of small investors.
Catalyst for UTI restructuring.

2003: UTI Act dismantled

UTI bifurcated into UTI MF (under SEBI framework) and SUUTI.
Industry move toward unified SEBI regulation.

2010s: Growth phase

Direct plan mandate (2013).
Categorisation circular (2017).
AUM growth from Rs 6 lakh crore (2010) to Rs 30 lakh crore (2020).

2020s: Consolidation and fintech wave

Franklin Templeton wind-up (2020).
COVID-era SIP growth.
Direct-plan platform proliferation.
AMC consolidation (Nippon-Reliance, HSBC-L&T, Bandhan-IDFC, etc.).
SEBI MF Lite framework enabling new entrants.

By 2025, industry AUM crossed Rs 65 lakh crore.

Industry milestones

1963: UTI established.
1987: First non-UTI AMC (SBI MF).
1993: Private sector entry permitted.
1996: SEBI MF Regulations.
2001: US-64 crisis.
2013: Direct plan mandate.
2017: SEBI categorisation.
2020: Franklin Templeton event.
2024: SEBI MF Lite framework.

External references

References

AMFI public records and industry data.
SEBI (Mutual Funds) Regulations 1996.
Indian financial press coverage.

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WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed: 19 May 2026
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