Overcome suspicions about capital markets, FM tells retail investors

Finance Minister P Chidambaram said that that retail investors need to overcome suspicion about the capital markets and steps were required to channel household savings into the markets.

"I hope confidence in the capital markets will increase as regulations become stronger. We must attract more retail investors to the capital markets. We must ensure that savers become retail investors," Chidambaram said at a function to announce the sale of UTI Mutual Fund products in 50 select post offices spread across 50 locations.

In the past, he said, there had been instances of scams and villains. "But once regulations are tightened and those responsible for the act are punished, confidence will be built," Chidambaram said.

The minister said that he expected UTI to design more products for the common man, whose interest was paramount, as they provided a bulk of the savings used for investment.

"Unlike countries like the United States, where there is hardly any savings, household savings provide a bulk of the savings in India. Savings must be rewarded in this country and what better way of investment than mutual funds," Chidambaram said.

The Finance Minister also praised UTI Mutual Fund for its turnaround and said that India Posts had the potential to grow into one of the largest entities in its field.

"If DHL, which is owned by the German postal department, can be the second largest courier agency in the world with its own aircraft, then someday the department of posts will also become a giant service provider," he said.

As per the India Post-UTI agreement, the mutual fund will focus on five schemes for distribution through the identified post offices. These include the UTI Children's Career Plan, UTI Variable Investment Scheme, UTI Mahila Unit Scheme, Ulip and UTI Mastershare Unit Scheme.

UTI Mutual Fund has already conducted a training programme for employees of the postal department.