| Consider the following statements about Mutual Funds in India. |
| 1. The first Indian mutual fund was set up in 1963 |
| 2. In 1987, the Government of India permitted public sector banks to enter the mutual fund industry |
| 3. More than 50% of Indian households have invested in mutual funds. Which of the above is/are correct? |
A) 1 only
B) 1 and 2
C) 2 only
D) 1 and 3
Correct Answer: B
Solution :
[b] The first Indian mutual fund was set up in 1963, when the Government of India created the Unit Trust of India (UTI). Until 1987, UTI enjoyed a monopoly in the Indian mutual fund market and sold a range of mutual funds through a network of financial intermediaries. In 1987, the Government of India permitted public sector banks and the Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) to enter the mutual fund industry. The State Bank of India's SBI Mutual Fund was the first such mutual fund to be established in 1987. Despite being available in the market for over two decades now with assets under management equaling Rs. 7, 81, 71, 152 Lakhs (as of 28 February 2010), less than 10% of Indian households have invested in mutual funds. A recent report on Mutual Fund Investments in India published by research and analytics firm, Boston Analytics, suggests investors are holding back from putting their money into mutual funds due to their perceived high risk and a lack of information on how mutual funds work/There are 46 Mutual Funds as of June 2013
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