Extend Jan Dhan model to mutual fund industry: BSE chief

New Delhi: BSE chief Ashish kumar Chauhan today batted for Jan Dhan kind of model for the mutual fund industry, a move which will help in channelising household savings into the instrument.

"The time has ripened for Jan Dhan Model to be extended for mutual fund industry as a suitable regulatory measure to enlarge and broad base its size both in terms of subscription and volumes for overall expansion and growth of mutual fund industry," Chauhan said while addressing a conclave of mutual fund industry.

He said that just as with the launch of Jan Dhan yojana the banking system could open up 25 crore of additional accounts, a similar initiative is called for mutual fund industry also.

"This would multiply the participation of common masses into mutual fund industry for more positive gains from currently estimated number of people of close to 2 crore with its total financial size, currently pegged at around Rs 20 lakh crore," Chauhan said at a PHD chamber event.

If the Jan Dhan Model is extended to the industry without any delay, just as the nation witnessed an anticipated progress on its financial closure angle, similar yield would also be noticed in mutual funds with its growth and volume multiplying manifold.

He, however, advised the novice and gullible investors to cautiously park their surpluses in mutual funds and other similar portfolios of equity market by intelligently weighing its pros and cons for higher and better returns.

The 42-member mutual fund industry currently has an asset base of Rs 19.26 lakh crore and a folio of 5.61 crore. Folios are numbers designated for individual investor accounts, though one investor can have multiple accounts.

Mutual fund industry players are of the view that well managed MFs are the best portfolios for investors compared to other savings channels in banks and traditional avenues.