The penetration of mutual funds in India and its growth has been remarkable. We have come a long way, but we still have huge potential, said Shri Amarjeet Singh, whole time member SEBI at the recent Mutual Fund Conclave organised by Bombay Chamber of Commerce & Industry, India’s oldest chamber of commerce and industry. At the same time he cautioned, that governance of AMCs is very important.
“Once Indian investors come in, they repose certain amount of interest or faith in the market and if that faith is disturbed, then they withdraw from that particular segment of the market and it’s very difficult to get them back. It is responsibility of all the stakeholders, including regulators, industry and investors to make sure that this trust and faith which is required is not disturbed and that is why we need good governance,” he said.
He further added that digitisation and the spread of information on social media has ensured that it does not take much time for negative news to spiral and reputations to be adversely affected. “Past experience has shown that once trust in the markets is lost, it takes a long time to rebuilt it. Since mutual funds have a very small ticket size, could be as low as INR 100 to 500, it is even more critical to maintain the trust and faith of investors. So, ensuring strong corporate governance practices and transparency within the mutual fund industry is crucial for future growth,” he stated.