Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey has expressed optimistic views on the future of the Indian mutual fund industry, emphasizing the "vast headroom for growth" that exists. Speaking at an event organized by the Association of Mutual Funds in India (AMFI) on the occasion of AMFI's Foundation Day 2025, Pandey highlighted the significant potential for expanding mutual fund penetration in the Indian market. He believes that tapping into this potential can unlock a larger pool of domestic savings and boost productive investment in the nation.
Pandey noted the impressive growth of the mutual fund industry over the past decade, with the number of investors increasing from 1 crore in 2015 to nearly 5.6 crore. The industry's assets under management (AUM) have also grown significantly, from around ₹14 lakh crore to over ₹75 lakh crore. However, he pointed out that mutual fund assets currently represent only about 22% of India's GDP, which is relatively modest compared to advanced economies, indicating substantial room for further expansion.
Systematic Investment Plans (SIPs) have played a crucial role in fostering financial discipline in India, with monthly inflows now exceeding ₹28,000 crore. Pandey used a compelling metaphor, describing each SIP as a seed planted in the soil of financial discipline, which grows steadily into a tree providing shade, fruit, and security. He emphasized that the industry should unite to bring small SIPs to every home.
SEBI has been actively involved in redefining the mutual fund industry landscape, including the introduction of "Choti SIPs," the MF Lite framework, and specialized investment funds (SIFs) to cater to various demographics. Pandey also mentioned the Mitra platform, which assists investors in tracing inactive and unclaimed portfolios, and MF Central, launched for consolidated holdings and simplified compliance. These initiatives aim to enhance trust, broaden access, and encourage responsible innovation in the industry.
Pandey stressed the importance of avoiding preferential treatment in redemptions and subscriptions, as well as exercising caution in micro-cap and debt investments. He also highlighted the need for increased vigilance against fraudulent redemptions and emphasized that data privacy must remain a top priority. Mutual funds are responsible for the actions of their vendors and third parties. Furthermore, SEBI is considering introducing incentives for first-time women investors.
In addition to regulatory efforts, AMFI is also taking steps to promote financial literacy and expand the reach of mutual funds. AMFI announced collaborations with leading educational institutions, including IIM Bodh Gaya, IIM Shillong, IIM Visakhapatnam, and XIM University Bhubaneswar, to spread financial literacy and empowerment across the country. AMFI also signed an MoU with the Department of Posts to train one lakh postmen to distribute mutual funds and extend financial access to remote regions.
