Mutual fund industry seen at Rs 20L cr

The mutual fund industry is pegged at Rs 7.53 lakh crore currently and due to recent changes in regulatory environment for managing pension and insurance assets, the AMC industry expects an increase of 2-7 per cent in the overall growth of the sector. This could add additional Rs 5-7 lakh crore in the next 5-7 years for the industry, Sundeep Sikka, CEO, Reliance Mutual Fund, says. Speaking to Shruti Srivastava, he says that simpler products and investor awareness is the key to increased retail participation.

Sebi recently notified wide-ranging reforms which will provide incentives to fund houses and encourage retail participation. What is your view on them and where do you think the industry is now headed?

With new and friendly regulatory guidelines, we are actually entering Version 2 of mutual fund industry based on four principles — educate investors and distributors, penetrate new markets, benefit all stakeholders, and take our reach beyond 15 major cities. I think they are the most forward-looking road map that has ever come out of any regulator. For investor education, Sebi has said that a certain percentage will be set aside. It will be roughly Rs 50 crore. Along with that a direction to move in smaller towns beyond 15 cities where normally the infrastructure cost is higher, that is also a positive move. Sebi is trying to educate investors, whether it has to do with labeling of the products, colour coding of the product, or simplification of the product. All these things are measures through which industry can go ahead. With more awareness, there will be a change of investment behavior. Right now, MF is seen more for equity. We believe there is a big potential for debts also. We believe that lot of money which is kept in banks as deposits will start moving towards the MF industry now.

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