Mutual Funds (MFs) form a part of the Indian financial sector and have gained significant position in the economy since the liberalization process started in 1992. The meteoric growth of the mutual fund industry enabled by the capital market reforms and economic growth is a clear direction for the future growth of this industry. Mutual funds today form 1/10th of the banking industry’s size. If we compare this an indication in the current interest rate scenario, MF has ample shelf-space to grow into an industry like the banking industry in India.

In the developed economies, MFs play a vital role in channeling the earnings of the investors towards capital formation.
MFs thus play a dual role by providing superior returns to investors and act as a key for economic development. Intermediaries play a vital role in promoting the sale of mutual fund schemes. The individual agents provided a strong foundation for growth of the industry in earlier years. Institutional intermediaries in the organized sector provided a much needed professional service to the industry and investors in the second phase of the growth of the MFs in India.
SEBI and AMFI’s initiatives for registration, certification and code of conduct have been vital in building a strong and informed selling force for the industry. This, in a way refrain marketing people from promising assured returns and misleading investors. With the application of technology and wider use of telecom facilities, MFs are attempting to reach a wider cross-section of our society.

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