McKinsey to restructure UTI operations

Chennai, Aug 2: Unit Trust of India UTI is undertaking a business process re-engineering exercise to recast operations. UTI has employe...

Chennai, Aug 2: Unit Trust of India UTI is undertaking a business process re-engineering exercise to recast operations. UTI has employed McKinsey amp; Co to carry out the exercise, said P S Subramanyam, chairman, UTI, here today. Tata Consultancy Services TCS will coordinate the development of a generic software for transactions processing. This will involve an investment of Rs 70 crore, he added.

Information kiosks and satellite offices are to be established to educate investors and make UTI more accessible. 8220;Our prime focus will be the small investor. The objective of the reorganisation is to prepare Unit Trust as the organisation of the millennium,8221; the UTI chairman said.

UTI will be making a special effort to mobilise more funds from the South. This region contributes 13 per cent to UTI8217;s overall business, said Subramanyam. 8220;The fact that so many dubious operators flourished in the financial sector in this region proves that investors here are not so prudent with their savings,8221; Subramanyamsaid. He said that UTI8217;s proposed millennium fund had been deferred owing to declining gold prices in the global market.

On UTI seeking a place on the board of companies, Subramanyam said the whole idea was mooted to improve corporate governance and shareholder value. Better governance will reduce the cost of capital for corporates. Besides, FIIs will be able to look at a broad spectrum of companies for investment and not limit themselves to half a dozen scrips.

Subramanyam said that UTI had already implemented nine recommendations made by the Deepak Parekh Committee set up to review the structure of US-64. The committee has made 19 recommendations in all.

UTI has approached the Sebi for clearance of its new monthly income scheme with an yearly assured income starting from the first year itself. The last MIP premium done in May had an assured income for five years at the end of that period. Subramanyam said the rate of interest offered for the new MIP scheme will be quot;an improvement over that of what thebanks offer,quot; he said banks are offering at present 10 per cent rate of interest and so the UTI MIP will be more than this.