Mutual fund investors would now be exempt from furnishing their Permanent Account Number for investments in systematic investment plans of mutual funds up to Rs 50,000, the Association of Mutual Funds in India (AMFI) Chairman, Mr A.P. Kurian, said.
“We are waiting for the official notification from the Government but the proposal has been approved,” said Mr Kurian, speaking on the sidelines of the Mutual Fund Summit 2009 organised by CII.
It is high time for harmonisation of the statutory and regulatory provisions with respect to the mutual fund industry, Mr Kurian said.
The industry is expected to record 150 million folios by 2015 from 48 million, Mr Kurian said. The industry added 10 million folios a year between 2005 and 2008 but the number declined to a mere 3 million in 2008-09, he added.
“We are waiting for the official notification from the Government but the proposal has been approved,” said Mr Kurian, speaking on the sidelines of the Mutual Fund Summit 2009 organised by CII.
It is high time for harmonisation of the statutory and regulatory provisions with respect to the mutual fund industry, Mr Kurian said.
The industry is expected to record 150 million folios by 2015 from 48 million, Mr Kurian said. The industry added 10 million folios a year between 2005 and 2008 but the number declined to a mere 3 million in 2008-09, he added.
Significant growth
The CII-KPMG Report on the Indian mutual fund industry, which was released at the summit, states that investment in mutual funds comprised 7.7 per cent of the gross household financial savings in FY 2008, a significant increase from 1.2 per cent in FY 2004. The report mentions that the households continue to hold 55 per cent of their savings in bank fixed deposits, 18 per cent in insurance and 10 per cent in currency as of FY 2008.
The industry is likely to continue to grow 15-25 per cent over the next five years based on the pace of economic growth, the KPMG report stated. In the event of a relatively slower economic revival, the industry may grow 15-18 per cent over the next five years, the report said.
“Industry profitability may reduce further as revenues of asset management companies shrink due to focus on low-margin products to attract risk-averse investors, and also as operating costs escalate due to the focus on penetrating retail population beyond tier-2 cities and operating costs escalate,” said the report..
Panellists at the summit stressed on the need for creating and selling simple products. “We need to sell products which can be explained to an investor in about five to six lines,” said Mr Milind Barve, Managing Director, HDFC AMC.
“There are more than 900 schemes, so simplification would help,” said Mr Dhirendra Kumar, CEO of Value Research.
The CII-KPMG Report on the Indian mutual fund industry, which was released at the summit, states that investment in mutual funds comprised 7.7 per cent of the gross household financial savings in FY 2008, a significant increase from 1.2 per cent in FY 2004. The report mentions that the households continue to hold 55 per cent of their savings in bank fixed deposits, 18 per cent in insurance and 10 per cent in currency as of FY 2008.
The industry is likely to continue to grow 15-25 per cent over the next five years based on the pace of economic growth, the KPMG report stated. In the event of a relatively slower economic revival, the industry may grow 15-18 per cent over the next five years, the report said.
“Industry profitability may reduce further as revenues of asset management companies shrink due to focus on low-margin products to attract risk-averse investors, and also as operating costs escalate due to the focus on penetrating retail population beyond tier-2 cities and operating costs escalate,” said the report..
Panellists at the summit stressed on the need for creating and selling simple products. “We need to sell products which can be explained to an investor in about five to six lines,” said Mr Milind Barve, Managing Director, HDFC AMC.
“There are more than 900 schemes, so simplification would help,” said Mr Dhirendra Kumar, CEO of Value Research.
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