The objective of India's development strategy has been to establish a socialistic pattern of society through economic growth with self-reliance, social justice and alleviation of poverty. These objectives were to be achieved within a democratic political framework using the mechanism of a mixed economy where both public and private sectors co-existed. In the 1960s, the era of Green revolution and industrialization, the planners and policy makers suggested the need for using a wide variety of instruments like state allocation of investment, licensing and other regulatory controls to steer Indian industrial development on a closed economy basis. This led to the establishment of the UTI or the Unit Trust of India through the Unit Trust of India Act, 1963 of the Parliament.
UTI was set up by the Reserve Bank of India (RBI) and functioned under its Regulatory and administrative control. It commenced its operations from 1st February, 1964 with the objective of mobilizing savings of the community and providing the small investors with a means of acquiring a stake in the industrial growth of the country. The first scheme launched by UTI was Unit Scheme 64. In 1978, UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over its regulatory and administrative control.
UTI remained the sole vehicle for investment in the Indian capital market for more than two decades, after which, the public sector banks were allowed to enter the foray. The vibrancy and competition increased with the setting up of the Security Exchange Board of India, a regulatory body. The Unit Trust of India Act, 1963 was repealed in 2001. This was followed by the bifurcation of the organization into - Specified Undertaking of Unit Trust of India (SUUTI); and UTI Mutual Fund (UTIMF) on 1st February, 2003.
Today, the two branches of UTI are carrying forward the legacy of the parent organization. The Specified Undertaking of the Unit Trust of India, with assets worth ? 29,835 crores at the end of January 2003, represented broadly, the assets of US 64 scheme, assured return and certain other schemes. This is a Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India, and does not come under the purview of the Mutual Fund Regulations.
The second branch is the UTI Mutual Fund, sponsored by State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation, with each of them holding 18.5% stake in the paid up capital of UTI AMC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI, which had in March, 2000 more than X 76,000 crores of assets under its management, and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, along with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth.
UTI is the oldest and one of the largest mutual fund in India. UTI Mutual Fund has been the pioneer for launching various schemes like UTI Unit Linked Insurance Plan (ULIP) with life & accident cover (Launched in 1971). Over the years, brand UTI has taken up the role of wealth creator for the masses. UTI is a process-oriented financial powerhouse with core business principle being customer delight through consistent fund performance and excellent service.
Department of Posts is happy to celebrate the journey of UTI by releasing a Commemorative Postage Stamp on it.
Source : Information Folder issued by Indian Posts & Telegraph Department, Government of India