The Full form of UTI is Unit Trust of India. It was established as a statutory body under the Unit Trust of India Act, 1963, and was owned by the Reserve Bank of India, the Life Insurance Corporation of India, the State Bank of India, and the Bank of Baroda. Its primary objective was to promote the growth and development of the Indian capital market.
History
The Unit Trust of India was established in 1963 with the aim of mobilizing savings from small investors and channeling them into the capital market. Its initial product was the Unit Scheme, which allowed investors to purchase units in a portfolio of securities managed by the UTI. The UTI quickly became popular with investors, and its assets under management grew rapidly.
In the 1980s, the UTI launched several new schemes, including the Children's Gift Growth Fund, the Mastershare Unit Scheme, and the US-64 Unit Scheme. These schemes were hugely popular and attracted large amounts of investments from retail investors.
In the 1990s, the UTI faced several challenges, including declining returns on its investments and allegations of mismanagement. In 1998, the government of India stepped in to bail out the UTI, and the institution was restructured.
Key Features
The Unit Trust of India was a mutual fund that offered a range of investment products to retail investors. Its flagship product was the Unit Scheme, which invested in a diversified portfolio of securities. The UTI also offered several other schemes, including the Children's Gift Growth Fund, the Mastershare Unit Scheme, and the US-64 Unit Scheme.
The UTI was owned by a consortium of public sector financial institutions, including the Reserve Bank of India, the Life Insurance Corporation of India, the State Bank of India, and the Bank of Baroda. It was regulated by the Securities and Exchange Board of India, the country's securities regulator.
The UTI played a significant role in the development of India's capital markets. It was responsible for mobilizing savings from small investors and channeling them into the capital market. It also played a key role in the government's disinvestment program, helping to sell shares in public sector companies to retail investors.
Conclusion
The Unit Trust of India was a significant financial institution in India that played a vital role in the development of the country's capital markets. Its flagship product, the Unit Scheme, was hugely popular with retail investors, and the UTI played a key role in mobilizing savings from small investors and channeling them into the capital market.
Despite facing several challenges in the 1990s, the UTI remains an important part of India's financial history. Today, it has been restructured and operates as UTI Asset Management Company, which continues to offer a range of mutual funds to retail investors.