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Mumbai, June 18 The mutual fund industry, which has grown 250 per cent in terms of its asset under management (AUM) in the past three years of bull run, feels that for sustaining growth, reforms are necessary.

“Some reforms in terms of dispension from mandatory PAN, creation of a level-playing field and empowering industry to offer pension products are necessary,” said Mr A.P. Kurian, Chairman, Association of Mutual Funds in India (AMFI) during the CII’s Mutual Fund Summit 2008 hosted in Mumbai.

“In order to place the mutual fund industry at a level-playing field with other industries, the Government could consider softening or removal of inter-regulatory arbitrage and pension sector reforms,” said Mr U.K. Sinha, Chairman, CII Mutual Fund Summit and the CMD of UTI Asset Management Company.

Regarding AMFI’s grievances with regards to mandatory PAN as a constraint, the SEBI Chairman, Mr C.B. Bhave, said that the compulsory PAN has not really hampered the growth of the mutual fund industry.

“Between 2003-2008, CAGR of this industry is 47 per cent next only to Russia at 97 per cent and China at 67 per cent,” said Mr Sinha.

Mutual Funds are livid about life insurance companies cornering huge investment through their Unit Linked Investment Plans (ULIPs). Of late, mutual funds have also started feeling the pinch from the mounting cost of their operations. “One of the biggest challenges for existing as well as new players is the mounting costs of operations in India,” said a report on Indian mutual fund industry released on the occasion by the CII-PricewaterhouseCoopers.

The report titled “Sustaining Growth in a Maturing Market,” emphasised that lease rentals and staff costs contribute the bulk of operational costs of most companies.

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