UTI chairman calls for greater awareness among MF investors

Our Markets Bureau

Mumbai, Oct 17: There is urgent need for more awareness and investor education with regard to investment in mutual funds, said Unit Trust of India (UTI) chairman M Damodaran. There also needs to be more disclosure and transparency among the MFs to improve MF-investors confidence, he added.

Addressing participants at the interactive meet on Wednesday organised by Indian Merchant’s Chamber on ‘The Road Ahead for Domestic Mutual Funds and Financial Institutions’, Mr Damodaran said mutual fund industry has a bright future, despite the current negative perceptions.

According to Mr Damodaran, the mutual funds industry is for long-term players and investors and therefore, one should not expect gains in the short period” Speaking on banks and financial institutions, Mr Damodaran said: “The government should reduce number of state-owned commercial banks through consolidation to improve the health of the financial sector. We do not need such large numbers of public sector banks and it will be in the interest of nation to see consolidation among 27 banks”.

Similar kind of consolidation was also necessary for some old private sector banks, which are undercapitalised and whose managements were not organised on professional lines, Mr Damodaran said.
On transforming development financial institutions into universal banks, Mr Damodaran said “they need to move in this direction to reduce the cost of funds”.

The government needs to continue support for specialised financial institutions like Export and Import (Exim) Bank of India to boost exports, he added.

Lastly, according to the UTI chairman, currently, there is a lot of inaccurate information and wrong impressions in the minds of the investors across the nation that MF should provide consistency dividend or reward.

However, bank fixed deposits, gold, real estate and other fixed maturity deposits will not have any long future, according to Mr Damodaran.