‘AMFI will try to develop a MF policy for the country’
The newly appointed chairman of the AMFI — UK Sinha, also the chairman of UTI Mutual Fund — is a worried man as he does not have a solution for the industry’s current problems such as losing on folios and weak inflow into equity funds.business Updated: Sep 30, 2010 23:35 IST
The newly appointed chairman of the AMFI — UK Sinha, also the chairman of UTI Mutual Fund — is a worried man as he does not have a solution for the industry’s current problems such as losing on folios and weak inflow into equity funds. He told Hindustan Times that he will sit with the regulator to figure out a solution. Excerpts:
The industry is losing on folio numbers and there is not much inflow into equities. How do you assess the situation?
It is a very critical time. August has been very bad and September appears to be worse. Financially, all companies are under stress. Their margins have come down, sales are negative and hence the sustainability of the model is under question. It’s a big problem and we can’t address it because there is nothing in our hands by way of compensating the distributors.
So, what is the solution?
I don’t have a solution. All I can say is that we will work with SEBI to find a solution and if the industry has committed some mistakes I would not like to repeat them.
How do you see the changes in Ulip guidelines?
Some of the differences in sales practices between insurance and MF products have narrowed but the gap is still wide. It would be unfair to say that make it exactly at par tomorrow, as it would impact the industry. In the long-term, I would argue that the gap should be removed because the products are similar.
What would be your priorities as AMFI chairman?
Our approach would be to work with the regulator and understand what they want the industry to do. We will also do some introspection as to what is it that we are doing wrong and what is that we need to do together to improve the general environment for the industry. Our effort will be to bring in more and more self-regulation. I can’t do it in a month of two but it will happen in some time.
Any other changes you plan?
I would like a mutual fund policy to be developed by the government and the regulator. Today there is an insurance policy, banking policy, but no such policy for mutual funds. While the government will make the policy, we would like to be the facilitators. As of now the industry is not obliged to do certain things such as going to remote areas. The thinking is there but it is not articulated and I want that to happen. AMFI will try to develop a mutual fund policy for this country.