Putting all eggs in one basket

The dominance of banks in the mutual fund space raises questions about financial stability that require careful examination

Mutual funds’ story has proven to be a good one for India. At present, there are 43 mutual funds (MFs) offering around 1,280 schemes to millions of investors through 147.4 million folios, and managing around Rs 43.20 trillion assets. This represents impressive growth from assets worth just Rs 0.80 trillion 20 years ago in 2003 — a compound annual growth rate of 22 per cent. 

MFs have played a pivotal role in inculcating a culture of investing among the masses in India, and have emerged as an alternative to putting savings in bank fixed deposits. In 2003, MF assets under