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Unit Trust Of India

UNIT TRUST OF INDIA

Origin of Unit Trust Of India

Unit trust was set up in 1964 by a special act passed in the parliament under the name of Unit Trust of India Act 1963, for the purpose to promote and regulate the mutual fund activities in India.

Capital Unit Trust Of India

The initial capital of Unit Trust of India was Rs. 5 crores which was contributed by Reserve Bank of India, Life Insurance Corporation, State Bank of India, Schedule Commercial Banks and foreign banks. Unit Trust of India can raise further capital through issue of bonds, accepting deposits and borrowings from Reserve Bank of India and Life Insurance Corporation.

Objectives Of Unit Trust Of India

Unit Trust of India functioning with the following major objectives:

• To promote the saving habits of small and medium investors.

• To provide stock exchange benefits to the small and medium investors.

• To reduce the risk of investors through diversified investment.

• To invest the funds on commercial purpose.

Functions of Unit Trust Of India

Unit Trust of India performs the following important functions:

• Mobilisation of funds through mutual funds.

• Grant term loans.

• Rediscount Bills.

• Undertake equipment leasing and hire purchasing.

• Housing and construction finance .

• Merchant banking services.

• Portfolio management services.

finance
[Post Image Courtesy of Sira Anamwong at FreeDigitalPhotos.net]

Management Of Unit Trust Of India

Unit Trust of India is managed with an independent board of Trustees and a full time chairman, which is appointed by the government. The trustees are nominated by the Reserve Bank of India, Life Insurance Corporation, State Bank of India and other commercial banks.

Subsidiaries of Unit Trust of India

Unit Trust of India also established some of the associates and group of institutions apart from their regular services:

• UTI Securities Exchange Limited –1994

• UTI Bank Ltd.–1994

• UTI Investment Advisory Service Limited–1988

• UTI Investors Services Limited–1993

• UTI Institute of Capital Market–1989

• UTI contributed to the establishments of the following institutions or organisations:

• Credit Rating Information Service of India Limited (CRISIL)

• Investment Information and Credit Rating Agency of India Limited (ICRA)

• Credit Analysis and Research Limited (CARE)

• Discount Finance House of India (DFHI)

• Stock Holding Corporation of India Limited (SHCIL)

• Over the Counter Exchange of India Limited (OTCEI)

Schemes of Unit Trust of India

Unit Trust of India introduced various scheme in the different periods. The major Unit Trust of India schemes are under:

• Unit Scheme–64

• Monthly Income Scheme

• Children College and Career Fund Scheme

• Grihalakshmi Unit Plan

• UTI Bond Fund

• UTI Money Market Fund

• UTI Growth Sector Fund

• UTI Master Share.

Working Result of Unit Trust of India

Up to 1987 UTI enjoys the Monopoly power in the field of merchant banking activities. In terms of cumulative indicators it accounted for 34% of the total schemes, 83% of the resource mobilized, 82% the investment and 81% of the unit holding accounts at 4th end of 1995-96. The gross net resources mobilized by Unit Trust of India through open ended schemes were Rs 7092 crore and closed ended schemes were Rs 3.85 crore in the year 2002-03.

About Author Mohamed Abu 'l-Gharaniq

when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries.

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