The Unit Trust of India (UTI) was established in 1964 by the government of India to promote savings from small investors and provide opportunities to benefit from India's industrialization. UTI initially had a monopoly on mutual funds in India. (first phase from 1964-1987). In the late 1980s and 1990s, other mutual funds were established but UTI remained the largest. In 2003, UTI was bifurcated into two entities, one being UTI Mutual Fund Ltd, owned by State Bank of India, Life Insurance Corporation, Bank of Baroda and Punjab National Bank.

1. Guidance by
Mrs. Mukta Rohatagi
Presentation by
Name Roll no.
Arun Kumar 7842
Manish Kumar 7900

2. The Unit Trust of India(UTI) was
established on 1st February, 1964
under the “Unit Trust of India
Act,1963” by the government of India.
Its establishment has been a landmark
in the history of investment trusts in
India.

3. There are two primary objectives of
UTI :-
(i) to promote and pool the savings
from small investors,
(ii)to give them an opportunity to
share the benefits and fruits of
prosperity resulting from rapid
industrialization in India.

4.  The main functions of UTI are as follows:
 To encourage savings of lower and middle-
class people.
 To sell units to investors in different parts of
the country.
 To covert the small savings into industrial
finance.
 To give them an opportunity to share the
benefits and fruits of industrialization in the
country.
 To provide liquidity to units.

5. First phase(1964-1987):- During
this period the UTI was the only
mutual fund company. It had
monopoly in the mutual fund sector.
The first scheme launched by UTI was
“Unit Scheme 1964”. At the end of
1988 it had Rs. 6,700 crores of assets
under management.

6. SBI Mutual Funds was the first non UTI
mutual fund establishment in 1987
followed by Canbank Mutual Fund ,
PNB Mutual Fund and several others
were set up during this phase. At the
end of 1993 the total Mutual Fund
industry had asset under management
of Rs. 47004 crores. However UTI
remained to be the leader with about
80% of market share.

7. With the entry of private sector funds
in1993, a new era started in Indian
Mutual Fund industry , giving the
investors has a wider choice of funds.
Also 1993 was the year in which the first
Mutual Fund Regulation came into force,
under which all mutual funds except UTI
were to be registered and governed. In
1996 the old Regulation Act was
substituted with “SEBI Regulation 1996”.

8. At the end of Jan. 2003 there were 33
mutual funds with the total assets
under management Rs. 1,21,805
crores. The UTI with Rs.44,541 crore
of assets under management was way
ahead of other mutual fund.

9. In Feb. 2003,following the
repeal of the “Unit Trust of
India Act 1663” UTI was
bifurcated in two separate
entities. One is “SUUTI” with
asset under management of Rs.
29,835 crores and the another
was the “UTI Mutual Fund Ltd”.

10. It was formed specifically to take over
the regular income schemes of the
Unit Trust of India. At the time of
formation it had Rs. 29,835 crores
fund. As in Jan.2014, the Govt. of
India holds 20.72% (Rs.8,060 crore)of
Axis bank. It also owns 11.3% of ITC
Ltd(Rs.19,800 crore) and 8.2% 0f L&T(
Rs.6,640 crore).

11. It was formed in 2003 by
bifurcating UTI. At that time
ownership was transferred to
four institutions namely SBI, LIC,
Bank of Baroda and PNB each
holding 25% shares. At present
these fours are the sponsors of
the UTI Mutual Fund Ltd.

12.  The UTI has been charged with the
lack of transparency in its operations.
 UTI has not been subject to any
regulation from various statutory
bodies including the SEBI.
 The UTI has been manipulated by
vested interests to effect the
transactions on the stock exchanges.

13.  The UTI has been accused of corruption at
various levels.
 Investors do not possess the right to attend the
annual general meetings of the trust.
 The expense ratio of the UTI is quite high.
 Investors do not get benefits of the capital
appreciation of the investments made by them.
 The pricing policy of the UTI is open for criticism.
 The operations of the UTI fall much short of the
standards of efficiency.
 The investors are not getting adequate return on
their investments.