Equity schemes lose 8.33 lakh folios since November 2009

After witnessing Rs3,400 crore redemptions in July, equity schemes shed 2.93 lakh investor accounts. Instead of expanding the investor base, SEBI is presiding over a shrinking investor population.

Despite a 9% GDP growth and a booming stock market, mutual fund investors are still shying away from equity schemes and trying their luck in debt funds. Since November 2009, three months after the ban on entry load on mutual funds, the industry has lost a whopping 8.33 lakh equity folios till July 2010. The benchmark BSE Sensex has risen 8% since November 2009. According to the latest data available on the Association of Mutual Funds in India (AMFI) website, the 40 fund houses have together lost 1.66 lakh investor accounts in the month of July.

Equity funds witnessed Rs3,400 crore redemption in July despite the launch of two new schemes.  

Debt funds added 1.18 lakh investor accounts in July while Exchange Traded Funds (ETFs) saw their investor base rising by 27,467. Fund of Funds, which invest in other funds, lost 7,955 folios.

Balanced funds, which invest a part of the corpus in equity, lost 10,459 folios in July. The total investor base or number of folios as on July 2010 stands at 4.77 crore. The five heavyweights of the industry together lost 93% (1.55 lakh investor accounts) of the total 1.66 lakh slump in folios. However, HDFC Mutual Fund bucked the trend by adding 23,544 investor accounts.

"There is a fear of the direct tax code (DTC) being applicable on capital gains. Some distributors are suggesting that investors pull out the money and re-enter afterwards. There is no clarity on the DTC yet. Some people are taking their own decisions. There is also some profit-booking," said a marketing head of a fund house.

Equity scheme folios declined by 1,47,745 last month despite a slew of launches like Baroda Pioneer Infrastructure Fund, Birla Sun Life India Reforms Fund, DSP BlackRock Focus 25 Fund, ICICI Prudential Nifty Junior Index Fund, IDBI Nifty Index Fund and Taurus Nifty Index Fund.

"Most of it is being redeemed because of the frequent and confusing changes in mutual fund regulations," said an industry source. Since last August, market regulator Securities and Exchange Board of India (SEBI) has made frequent changes such as removal of entry load, changes in cost structure and also who gets the trail commissions when investors switch from one scheme to another. "SEBI's mandate is market development and investor protection and what we are witnessing is a shrinking investor base. Some serious rethinking is needed is needed about SEBI's recent actions," says a mutual fund head.



kishore ghiya

6 years ago

respected bhatsaheb, tks.There is saying in gujarati AAP MUVA SIVAY SWARGE NA JAVAY motto is whatever u do you have to learn. Our PM says to investor take informed decisions.Many restaurants are avilable but i cook my own food,so each has its own thinking,
It is not my money but belongs to my family which has five loving grand daughters and for them i am working. My grand father worked very hard and saved and left for me a booty worth crores, so again each has his own thinking.
The cost is shared by each member you contribute your share of cost, for my sake pl visit fool.com yoou will get all the answers. Because of self help and self education i am proud to inform you that rajkot center with population of 10 lacs today is number one per capita basis as far as IPO share or sahre of cash volume on bse. It is no 1 and giving 4% of daily cash volume nad 90@ of brokerage houses and all the ipo players have to visit rajkot. The town has benefited from self education..
I am not offended but gandhiji and sardar vallbhbhai patel have taught us benefits of cooperative movement,investment club is nothing but cooperative of investors.
i am also succesfully running two coperatibe banks and had formed public limited company 25 years back in rajkot as a close end mutual fund and our motto is collective investment with minimum labour.We 400 share holders have benefited and r waiting for smes exchange to function when you will it being traded..
It is pleasure differing to your views, regards kishore ghiya rajkot 9825217857

Keshav B Bhat

6 years ago

Dear Mr Kishorejee,
Due respect for your age, knowledge and concern for the investors. i fail to understand people of your age are writing like this "all investors should educate themselves and do investments themselves + All financial players are greedy".

kindly if that is the case first of why do u want to invest your money?. is it not the motive of profit? If there is no profit why any body will run his/her bussiness?.
As u are saying invest clubs are no profit organisations. I do agree but to run an organisation it costs, kindly can u explain me from where that money will come. Further to run this organisation some body has to spend time - do u mean to say that does not cost?.
This same attitude of the people thinking that' if i do not pay upfront i will gain a lot and I am the smartest" is the main reason behind all the ills. I am really even in the eve of their life people do not try to understand this.
I am sorry if I am hurting somebody by writing this comment but it is the truth- nothing comes free if u wan to earn or save something u have to pay for it with time and money.
Keshav B Bhat

kishore ghiya

6 years ago

Dear mr roopsingh, tks for response.You must visit fool.com and study how investment clubs are formed and run, It is collective idea, there is no profit.Ot is their collective decision where to invest through which broker or which schme.I am 30 yr old investor with hugh portfolio,nobody can influence me.finacial players are all greeedy that is why investors have to educate themselves and what better way then together. When i go to bank for depositing for FD there is no entry load why when depositing with amc.Amcs are earning 2% for handling our funds.Sebi regulates AMCs so it is only sebi who is supposed to protect investors not the amcs.Pl visit fool.com i shall appreciate ur comment afterwards. regards kishore ghiya 9825217857


6 years ago

Dear friend Mr kishor,i appreciate the new ideas about investors club formation-do u mean to say these clubs run on 'no profit motive''?i must say some one must be negotiating from these clubs to invest in amc's and rather opposite some one from amc's must be trying to influence key person from these clubs to pull money-remember ''ants reach any where if they smell sugar''so there is no validity in your point of ''free''service-financial field is full of greedy white collor criminals-dont talk about USA-it is bigger scandolous then india-
AMC's were pioneers in fuelling idea of direct investment(without brokers)and now they are reaping their sown seeds-so real situation in india is different then developed economies-AMC and SEBI needs to recognise it soon-better it is understood better it is for MF industry

kishore ghiya

6 years ago

mr keshav bhat and other friends,
Many finacial advisors,distributors and brokers may not have liked my note oninvestment clubs. Pl visit fool.com it is site of investors and thre are ten articles on investment clubs. Today in usa monthly more funds are coming to capital market through investment clubs then through MF industry. Thisis fact of life. In usa your can directly subscribe to mutual funds and there is no entry load. It is monopoly of distributors is gone and cost is saved.

Investment clubs is the coperative movement and is working in india.If they get educated they will save brokerages.In USA there are discount broers who do trade at very low brokerage. There the brokerage is on trade basisi and not on %age basis.We shall be moving to that stage when investors come back to share bazar,
Today every 1000 pt rise in sensex and investors are quiting. I am very old 30 year investor in equity market handling my family funds of ard rs 70 crore and this is my suggestion.In democracy we can always differ but investment clubs time has come or we lose our savings to infltion.

Keshav B Bhat

6 years ago

Dear All,
If self education and mastry on all matters is the solution for everything in life, there is no necesaary for any proffessionals bussiness etc as every one will do all their necessiyies by their own - if he or needs food why pay money to any suppliers of reqd items learn and grow your own food supplies and eat. If bu need a car why to purchase it manufacture your own, to maintain it why u need a mechanic, repair and maintain your own self. If you want a house why to puchase it build yourself by produsing all the required material. hope the so called financial experts and expert advisors realise this before it is too late.
Keshav B Bhat

Ranjan D Gupta

6 years ago

Yes, it is true that the small investors in MF schemes who use to put small money to fulfill some future liabilities are now in serious distress. At least earlier he use to see the face of IFAs to give him service but now he finds nobody to guide him when to invest and in which scheme to invest. This is a great gift to the small investors by SEBI.Sebi had taken a very hasty decision in eleminating entry load.Sebi thought that with 2% savings investors will build up castles . Mr.Bhave has been telling that ban on entry load will stop mis-selling. To eradicate mis selling there were lot of other ways also but he failed to give serious thought . Let me explain, In the first step Sebi should have directed to all AMCs to standarise the commission to distributors for all equity schemes.This would eleminate the chance of selling something which bear higher commission.To give the cost advantage entry could be reduced to 1% instead of 2.25%. The upfront commission would have been fixed at 0.75% and trail commission would have been 1% or 1.25%. Exit load would have been fixed at 2% to 4% during one to three years.The effect of such measure would be every investor would think for long term investment. In fact Mutual Fund investment is for long term only. It would reduce the redemption. Investors would able to see long term investment benefit. IFAs were also happy and they would not advise to change schemes frequently because they would understand that they would lose higher trail fee if changed to other scheme.Under this situation everybody would be very happy and business would flow in. But very learned directors of SEBI failed to realise these things.

kishore ghiya

6 years ago

Investment clubs and self educaton is the answer americans have found. If you want to earn more than FD income you have to work and working together and exchanging idea is the only way.pl read the article from usa site fool.com

How to Start a Club


There are many steps involved in getting an investment club up and running, but fret not -- most of them are relatively straightforward. We've summarized many of them below and we've also prepared a short book, "Investment Clubs: How to Start and Run One the Motley Fool Way," which offers a concise coverage of what you need to know. If you're greedy for much more detail, check out the NAIC's " Starting and Running a Profitable Investment Club" by Thomas E. O'Hara and Kenneth S. Janke.

Below is a list of steps to help you along. It's fairly thorough, but isn't set in stone. We're mere Fools, remember, so we may well have left out a step or three. If you have any constructive feedback or suggestions, please share them on our Investment Clubs discussion board.

- Start talking with friends and see who's interested. It's best to gather a variety of people who will bring to the club a variety of interests, experiences, and perspectives. Once you find a few interested friends, let them invite a few of their own friends. Aim to form a club with roughly 10 to 15 members, give or take a few. Anything from 6 to about 20 is probably workable. Too few and you may have trouble accumulating funds to invest. Too many and you'll have trouble having quality discussions and finding a place to meet.

- Don't assume that you're doomed if your group is composed only of utter novices. That can be a very good thing. Sometimes, if you mix in some sophisticated investors with novices, the sophisticates can get bored or frustrated, and the novices can get intimidated. Don't doubt that a bunch of novices can tackle learning everything together. (Remember, you have a lot of resources to help you, such as the online community here at the Fool.)

- Distribute information about investment clubs to anyone who has expressed interest. Perhaps print out the material you've found here. You want people to learn what investment clubs are all about and think about whether they're really interested.

- Gather all interested parties for a preliminary meeting. Meet to discuss (A) whether you have enough in common, (B) how you'll be organized and run, and (C) whether people are still seriously interested in forming a club. The following items are things that you should try to agree on. It might be good to go around the room and get everyone's thoughts on each of these issues.

- Make sure that you all have similar or compatible investing goals. If some people want to double their money in two years and then get out, that's not only unrealistic, but also probably at odds with those who want to learn and slowly grow their savings.

- Agree on the amount of the monthly minimum contribution. You don't have to set this as high as possible. Remember that this is a learning activity, and you can always increase the amount at a later date. Many clubs allow members to contribute more than the monthly minimum level if they so desire. Also, contributions to the club shouldn't necessarily be the only investment you make. You might be contributing $25 per month to your investment club, but putting aside $150 per month for your personal savings and investing.

- To the degree that you can, agree on some common ground regarding a general investing philosophy and approach. As an example, perhaps you agree that Warren Buffett's approach is one you'd like to incorporate or emulate. Maybe many of you believe in Foolish investing tenets. Perhaps some want to find significantly undervalued stocks, while others want to find high-flying stocks. Differences don't necessarily represent a death knell, but it's good to start out knowing how everyone feels. And besides, many investment styles are not diametrically opposed. Fools and Warren Buffett have much common ground.

- Agree on a set of common-ground references, instructions, tools, and/or readings. Dare we be presumptuous enough to suggest that the "Motley Fool Investment Guide" or the " 13 Steps to Investing Foolishly" could be such references? (Yes, we dare!) Peter Lynch's "One Up on Wall Street", "Beating the Street", and Learn to Earn are some other fine works. You might even all agree to subscribe to a certain magazine, such as SmartMoney, or to regularly read the Fool's news and commentary.

- Agree on a regular meeting time, place, length, and format. One reason to try and keep a club size to no more than about 15 people is that it permits meetings to be held in living rooms. Another possibility is to seek out some other space, like a local library or church. A coffeehouse or local watering hole might also work. Perhaps a member has an available meeting room at his workplace. Decide when you'll meet, and how often. Most clubs meet once a month. For the format, outline the various items of business you plan to cover at each meeting and allocate an amount of time for each. This will help you keep meetings running efficiently and prevent someone's report from going on for an hour and dragging things out too long. Most meetings will probably last between one and two hours.

- Agree on snacks. Snacks can be a very important part of any meeting. In unfortunate situations, it might even be what meeting attendees look forward to most. Your club can choose to bypass snacks -- or you can decide to take turns bringing donuts or cookies.

- You'll need a name for the club. You can be straightforward and name the club after something like your geographical region, or you can be creative. Names that some clubs have used include: The Money Makers, The Small Wonder Investment Group, Blue Chips and Salsa, The Common Bond Investment Club, Common Cents, The Fortune Seekers, The Steady Plodders, The Live and Learn Investors, The Silk STOCKings Investment Club, Stocks and Bonding, Blooming Assets, Lady Investigators, The Hounds of Xemba, The Stockettes, Fortune Hunters, Dynavestors, and so on. One group of women named their club the Stroke of Luck because they all met at a doctor's office. Their husbands had had strokes, leaving the women suddenly needing to take control of the family finances.

- We've covered a lot of ground so far. If this has taken a long while, you could close the first meeting and resume organizational discussions at the next. There's no rush. Below are more (yes, more) things to settle as you set up your club.

- Agree on how you'll be organized legally and operationally. The NAIC guide noted above and the Fool investment club book both include sample legal language for contracts and agreements. Some Fools online have also shared their agreements. This might sound scary, but you should realize that your $20 or $50 initial contributions will be growing into a significant pile of wealth. You'll need to have formal agreements in place to protect yourselves in case one member turns out to be a dastardly demon. Don't neglect this paperwork issue. For your club to be recognized as a legal entity, there are forms to fill out.

- As part of the previous discussion, you'll have determined how your club will be organized -- or at least will have begun talking about it. Finish that now. Agree on what responsibilities there are, and what kinds of officers you'll need to elect to take on these responsibilities. Clarify what the responsibilities of the officers, as well as club members, will be. (Remember that even regular, non-officer members have responsibilities.) Elect your officers in one of the first meetings. Typical clubs have:A president/presiding partner, who sets meetings, presides over them, and plans activities.A vice president/assistant presiding partner, who fills in when needed and might also run the education program.A financial partner/treasurer, who deals with the brokerage, buys and sells stock, and keeps records of the club's holdings as well as each member's share. (This needs to be a careful, detail-oriented, and responsible person.)A recording partner/secretary, who keeps minutes of each meeting, reminds members of meetings when necessary, and possibly mails out minutes to members who miss a meeting.Some clubs have a separate education officer, responsible for planning (with the input of the group) an educational program, which might include presentations, field trips, guest speakers, and assigned reading.

- Since you're likely to be a Foolish club, though, you might come up with some more inspired names for offices. Some examples are below:Big KahunaNot-Quite-as-Big KahunaHigh Priestess of LearningFoofah of FinancesHead Honcho of Minutes and AgendasSuperintendent of Snacks

- Assign someone to look into choosing a broker. Some clubs have traditionally favored full-service brokers, who'll provide some advice and guidance and perhaps even attend meetings on occasion. Contrary to this, Fools generally opt for discount brokers. Discount brokers may offer some research, but they won't tell you what to buy or sell. Since in a club your group should be calling its own shots, you don't need to pay hefty commissions to full-service brokerages. Discuss the differences between full-service and discount brokers and decide which you prefer. Consider taking advantage of the incredibly low commissions offered for online trading by


6 years ago

I would only like to say that it is the retail investor, who has been killed completely by Resp Mr Bhave by his actions. A retail investor is not the one having lakhs and lakhs to put into Mfs. A retail investor is who puts in a few thousands of his hard earned money into Mfs to be able to generate better returns for himself. Even with a 2% load, the investor was not in a position to compensate the expenses incurred by IFA to service him. Without this small load, who would do the social service for these very investors for whom Mr Bhave is so concerned. It clearly was to take some kind of revenge from IFAs.

Or else he wants only the HNIs ( who can afford to invest in Lakhs) to get the benefit of investments.

Therefore, even if the folios go down by another 10 Lakh, what is the worry.

Mr bhave will get his pension benefits along with a lucrative post retirement post, pretty soon. As he has very well served those who are in position of power.

Keshav B Bhat

6 years ago

Dear all,
Today everybody is talking about investor education in financial sector perticularly about investments saying that IFAs/distributors are misselling. Now may I ask one thing if few doctors are not good do you expect every one to educatethemseves in medicine and treat themselves for all ilness or advise them to go to a good doctor. If a electrician or a plumber or paintera mason does a bad job do you expect the people to educate themselves and do all these jobs themselves or advise them to find a person who does a better job?
If a IFA or distributors work is not satisfactory to a client, he or she should find out another IFA or distributor who will do the job properly that is the only solution best suited for any of the investor other than the proffessional investors. Hope Mr Bhave and other phsychopants understand this at the earliest.
Keshav B bhat


6 years ago

Comments invited on RBI New Banking Licence Policy
Before issuing any more licences to the NBFC & Industrial/Business houses, let us go through the ground realities from different angles as an Investor, Depositor & as a Regulator of the Republic Citizens of India and then let us come to an debatable conclusion if India really requires new faces of private banks and if answer is really YES then let us first answer some questions i.e. whether the existing regulator has enough capacity to monitor those new faces? Whether the regulator was successful in the past in monitoring the existing banks? Where is the accountability of the regulator & the promoters in monitoring those sunk ships like GTB and various NBFCs like CRB, Lloyds etc ? Is our Regulator known for giving clean chits?. How does RBI monitor those mushrooming Microfinance companies ? who loot the underprivileged by charging 25% to 40% Interest in the name financial inclusion, by adopting all unethical practices including involvement in money laundering activities. Does RBI has control over Microfinance Companies towards end use of those funds? Or is it the best time to consolidate banking sector with few private and nationalized bank and save the investors money. Let us discuss all those points in detail on
moneylife dot in/article/8/8106 dot html#comment-4969

Conclusion : In present scenario we don’t advise any more new faces in private banking including Co-operative Banks and yes if you really feel that we have to achieve the financial inclusion targets then float INDIAN POST BANK at every post office and start landing activity through them, which will give some facelift and income to the hardworking employees of Indian Postal Services including our underprivileged POSTMAN who are also the part of financial inclusion

Sanjay Prabhu – Pune
President - Private Bank Employees & Investors Protection Forum
Sanjaymprabhu at gmail dot com 95940 88588


kishore ghiya

In Reply to SANJAY PRABHU 6 years ago

Mr sanjay prabhu view is not to allow new banks.He has a right as bank employee but he should not wear cap of investor protection forum. It is conflict of interest. RBI after madhavpura scam cooperative banks licences are not being given. Small borrowers and businessmen are denied forming cooperative banks for their own needs.RBI HAS FAILED TO PAY DEPOSITOERS in time.In usa as on today everydays banks fail but depositores are paid immediately by FED asking other banks in neighbourhood to take over business and compensating the banks for losses from insurance funds. The rbi is direction less as far as meeting the needs of small businessman. I wish FM forces rbi to open up coop sector and allow competition to come then only big private abnks and nationalised banks will improve. Or allow more licences to foreign banks to serve indian customer. Without competition nothing will change.
kishore ghiya rajkot 9825217857


6 years ago


kishore ghiya

6 years ago

Investor education is the only solution for investing.MF industry should go for encouraging and promting new investment clubs and sebi should tell CBDT to give same tax concessions as MF industry.
pl visit fool.com and learn more abt investment clubs in USA
kishore ghiya rajkot mob 9825217857


6 years ago


Ranjan D Gupta

6 years ago

It is still not late to re-think the matter of different SEBI regulations.SEBI is not God so there is no meaning to think that what regulations SEBI introduced are all good for the industry.In fact a rule is having efficacy or not can be rightly judged in perpective of results it give out.SEBI should take lessons from the scenario under which MF industry is struggling hard to keep their head high above water. I once again re-iterating that ban on entry load is not a solution to curb mis-selling.Neither it is giving any advantage to the investors in monetary savings because such benefit is going waste as and when investors decide their own to invest in a scheme not suitable to their risk appetite.

Why is GAIL’s stock price lagging?

The key reason is capped gas output of Reliance. But GAIL has a few options up its sleeves to get growth going

Gas Authority of India Ltd (GAIL) is the only gas stock that has not been outperforming over the last month or so largely because Reliance Industries has capped its gas production. GAIL's latest analyst meet provides some clues to its future performance. Moneylife had said on 17th July that gas stocks could outperform because Section 16 of the PNGRB Act of 2006 which was notified from 15th July gives PNGRB authority to issue distribution rights to companies retailing CNG for automobiles and piped cooking gas to households, speeding up this process all over India.

Since then, Indraprastha Gas has moved from Rs293 to Rs305, Gujarat Gas from Rs302 to Rs320, and Gujarat State Petronet from around Rs100 to Rs110. Only GAIL has stayed at around Rs450.

One obvious explanation of this performance is that it is already trading at premium valuations and that RIL unexpectedly capped its gas production for this year. However, in its analyst meet, GAIL laid out a strategy to get around this hurdle. It is now banking on higher gas pipeline throughput by importing 2-3 spot LNG cargoes/month. Besides this it also said its capex plans are on track - it is investing huge amounts in pipelines over the next three years, doubling the capacity of its petrochemicals plant in Pata (Uttar Pradesh), is planning to enter city gas distribution (CGD), and has made investments in the power sector.

Biggest driver: Gas transmission

In the short- to medium-term, GAIL believes that global LNG markets will be oversupplied. Additionally, the Indian market is facing a shortage with RIL capping its KG DG gas production. GAIL plans to take advantage of this situation by buying 2-3 cargoes on the spot market and increasing its gas transmission volumes. It is confident that it will find buyers for LNG, even if it proves a little expensive. GAIL plans to route these extra volumes through PLNG, Shell Hazira, and later through the Dabhol terminal which is expected to start in Q4FY11. Petronet LNG will be a huge beneficiary of GAIL's plans of importing ~25 spot cargoes in a year which could translate into ~1.5 MMTPA of re-gasification volumes for Petronet.

Capacity expansion: Aggressive and on track

GAIL plans to invest close to Rs300 billion between FY11 and FY13 - of which 67% is on pipelines, 6% on exploration and production (E&P), and 9% on petrochemicals. To fund this, it has plans to borrow Rs154 billion over FY11-13 of which term loans could be 31%, bonds 31% and external commercial borrowings. The company has a low D/E ratio of 0.08:1, which may allow it to get cheaper loans.

A quick snapshot of its seven key pipeline projects

* DVPL phase II, 610km, Rs52 billion (to be complete in April 2011)
* Vijaipur Dadri, 505km, Rs57 billion, April 2011 (partially complete)
* Dadri-Bawana-Nangal, 646km, Rs24 billion, April 2011 (partially complete)
* Chainsa-Jhajjar-Hissar, 349km, Rs13 billion, April 2011 (partially complete)
* Jagdishpur-Haldia, 2,050km, Rs76 billion, phase I - March 2012; phase II
January 2013
* Dabhol-Bengaluru, 1,389km, Rs50 billion, phase I - March 2012, phase II
December 2012
* Kochi-Mangalore-Bengaluru, 1,114km, Rs33 billion, phase I - March 2012,
phase II - December 2012.

GAIL is doubling the capacity of its petrochemical plant at Pata to 900 KTPA in 42 months (first phase of 500KTPA in Q4FY11 from 420KTPA currently).

In the E&P segment, GAIL is commercially producing crude oil from the Cambay basin and expects its generating blocks to a total of three by FY14 (27 blocks of which eight are onshore, 18 offshore, and one is a coal-bed methane block).

While GAIL is not a serious player in the power segment, it has made a few exploratory investments. It has a stake in Reliance Gas Transportation Infrastructure Ltd for its 1,600MW power plant, a stake in Gujarat State Petroleum's power plant, a wind energy plant at Bhuj, and has plans to set up small power plants along the Dabhol-Bengaluru pipeline.

Among all of GAIL's future plans, it is possible that the importing spot LNG cargoes will give the stock a fillip in the near term while the expansion of its gas pipeline network and its petrochemical expansion will a be good long-term driver


IRDA not to change ULIP norms, despite industry concerns

New Delhi: The Insurance Regulatory and Development Authority (IRDA) today said it will not tweak its proposed guidelines on Unit-Linked Insurance Products (ULIPs) even as the industry fears that the norms, to be effective from next month, could squeeze their profits in short term, reports PTI.

"We have considered all that (the proposed guidelines) and we do not see any need for worry from the regulations already there. We will have to balance the profits of insurance companies with what is right and proper," IRDA chairman J Hari Narayan told reporters on the sidelines of a Federation of Indian Chambers of Commerce and Industry (FICCI) event here.

The regulator, in June, had come up with new guidelines for ULIPs under which the investments would be locked in for five years, up from three years now.

Also, the agents' commission would be reduced and even if investors opt out earlier, the discontinuance charges will be lower than they were before.

Insurance companies are of the opinion that the capping of surrender charges and the even distribution of charges over the lock-in period of five years will adversely impact the profitability of companies.

When asked whether the profitability of the insurers would be impacted, he said, "I do not think that the performance would be significantly impacted in this fiscal or next fiscal."

He said the insurance companies will have to contain expenses to maintain revenue in the long run.

"The insurance companies require to get back to a much reasonable expense pattern for sustainability. We do not want to spin the industry to a high cost sector," Mr Hari Narayan said.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)