THE GROWTH OF MUTUAL FUNDS IN INDIA

Before getting into the analysis of the mutual funds in our country, let us first understand
what mutual funds are.

MUTUAL FUND: A mutual fund is a professionally or expertly managed investment fund

that pools money from various investors and invests the money collected into different
securities. There is no such legal definition for the term mutual fund.
Therefore unlike in case of traditional investment techniques, mutual funds give the investor
an opportunity to invest into various securities.

HISTORY
According to researchers mutual funds were first introduced in Europe in 1774 in Holland
more commonly known as Netherlands. They were introduced in the USA in the 1890s and
became popular in the 1920s.
Mutual funds were first introduced in India in the year 1963 by the UTI. The UTI enjoyed a
monopoly in the Indian mutual fund market till 1987, for almost a quarter of a century the
UTI faced no competition. A lot of people invested into the UTI scheme and it made them a
lot of money.
In the year 1987 a lot of government controlled financial companies entered the market and
the state of the mutual fund market in India changed completely. Companies such as State
Bank Of India, Canara Bank, Punjab National Bank etc. entered the market and established
their own funds and fund houses.
The market was finally opened to the Private Sector in the year 1993 due to the privatisation
policy which was adopted during the economic and constitutional amendments made in 1991.
This allowed the private players to enter into industries which were otherwise restricted only
to the public sector. This again brought about a change in the mutual fund market.

As of today there are a total of 34 mutual fund houses in India. Everyday more and more
people are investing into mutual funds. This means that the people are aware and are wanting
to invest their money to earn more money.