History of mutual funds in India

Tue, 19 May 2026 00:00:00 +0000

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.

History-of-Mfs-India-1963 on WebNotes