Follow Us:
Thursday, January 27, 2022

Common platform for MFs by March 2010

In order to improve the operational and service efficiency of mutual funds,a committee established under Association of Mutual Funds in India...

Written by Niti Kiran | New Delhi |
July 20, 2009 1:26:48 am

In order to improve the operational and service efficiency of mutual funds,a committee established under Association of Mutual Funds in India (Amfi) is planning a Common Industry Platform. The objective is to enhance the convenience of distributors and investors. Everything will now be available to them at the click of a button — so all they will have to do is to go online to check the NAV status of the fund or buy or sell funds. The common platform will be operational by the end of March 2010.

The new platform will ensure better accessibility to the investors,ease of operation for the distributors and reduce the cost and increase the penetration of asset management companies (AMCs). “Today more than 50 per cent of the savings go to the banks,nearly 17 per cent to insurance and just 7.7 per cent come to mutual funds. By and large,the penetration of mutual funds is low. Moreover,the operating profits in India are 6 basis points lower than the global average and this is mainly due to the high operating costs. The common platform will help in reducing the cost and will offer improved services to the investors,” says Jaideep Bhattacharya,CMO,UTI AMC,who is also the chairman of the panel on the Common Industry Platform for AMFI.

Convenience will be enhanced for investors through this platform as it will give them multiple choices of transaction such as through banks,post offices,distributors,online,direct or through mobile platforms. Moreover,there will be a single point of access and investors will be able to obtain a single or a consolidated statement of all their accounts. As far as the distributors are concerned,60 per cent of their time is consumed in operation and only 40 per cent is utilised for sales. The new platform intends to reduce the operation time and increase the sales time,thereby increasing the efficiency of the distributors.

According to Bhattacharya,“With this idea,the estimated paper volume will be reduced to 1/5th,paper cost will be reduced to 1/3rd and the estimated transaction cost will be cut by half in the next five years.”

Four vendors have been shortlisted,out of which one will be selected to implement the programme. However,the names of the vendors have not yet been disclosed.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest News Archive News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard