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Regular-article-logo Friday, 18 July 2025

Private status for UTI Mutual

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The Telegraph Online Published 18.11.05, 12:00 AM

New Delhi, Nov. 18: (PTI): UTI Asset Management Company, India’s largest mutual fund, today became a private company with the fund house’s four sponsors, namely, Life Insurance Corporation of India (LIC), State Bank of India (SBI), Punjab National Bank (PNB) and Bank of Baroda (BoB) paying the government Rs 1,236.95 crore for reducing their holdings.

“UTI AMC will henceforth run as a private mutual fund competing with the rest of the industry under the regulations and supervision of the Securities and Exchange Board of India,” finance minister P. Chidambaram said at a press conference here. The finance minister today also met the chiefs of the public sector banks.

Chairmen of four sponsors ? A.K. Shukla of LIC, A.K. Purwar of SBI, S.C. Gupta of PNB and BoB’s A.K. Khandelwal ? handed over cheques worth Rs 309 crore each to the finance minister.

The four sponsors will now own 25 per cent stake in the mutual fund that manages assets in excess of Rs 25,000 crore of 67 lakh investors.

Chidambaram said: “Though the sponsors have been managing the affairs of UTI Asset Management Company, today is the culmination of the government’s efforts to restructure Unit Trust of India.”

Wishing UTI AMC and its investors all the success, the finance minister said: “I am sure that under the new management, it will reach new milestones and continue to serve the basic purpose for which the erstwhile Unit Trust of India was created in 1964.”

The trust was set up to function as a vehicle for mobilising domestic savings needed for the growth of the Indian economy and channelising the benefits of economic growth to households.

In 2001, Unit Trust of India was split into two entities ? UTI-I (or specified undertaking of UTI) and UTI Asset Management Company after the fiasco of its flagship Unit Scheme-64.

The government transferred the assured return schemes under SUUTI and issued bonds totalling Rs 14,500 crore ? US-64 bonds at 6.75 per cent coupon rate and ARS bonds at 6.6 per cent to bailout the beleaguered fund that had over Rs 60,000 crore of assets under its management in 2001.

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