The share of MFS in the gross financial savings of the domestic sector increased in FY’23 to 6 percent of 0.9 percent in FY12
In an evolving scenario it may be necessary to keep an eye on the MFS factors, because they have consequences for household savings and the changing dynamics of domestic capital markets. Increasing the participation of the stores also justifies more efforts for the education and protection of investors to maintain the faith and confidence of these newcomers, the RBI -Bulletin said.
As MFs grow in size, a constant monitoring of risks arising from their activities would need more attention, it added.
The share of MFS in the gross financial savings of the domestic sector increased in FY’23 to 6 percent of 0.9 percent in FY12.
Despite a traditional cautious approach to the financial markets, the population has shown a perceptible tendency to embrace a greater financial risk in their personal investment choices in recent years.
Quarrel
Assets in the management of the MF industry registered a compound annual growth of 17 percent to £ 66 Lakh Crore in March of £ 6 Lakh Crore in March 2010.
The AUM of female investors in MFS in India has more than doubled from £ 5 Lakh Crore in March 2019 to £ 11 Lakh Crore in March 2024.
Monthly electricity through systematic investment plans has registered new lifelong highlights, which in June crossed the Crore marking of £ 27,000, despite increased volatility in Indian stock markets in the recent period due to geopolitical developments and trade -related uncertainties.
The tilting of retail investors in relation to shares is also reflected in the fact that about two-thirds of all MF accounts are aimed at stock-oriented assets.
Increased risk
The market value of small and midcap shares in the hands of MFS in March was around £ 14 Lakh Crore, good for more than a fourth of the equity of MFS.
Given a relatively low liquidity in the small and midcap segments, MFS can be subjected to large liquidity risks due to repayment pressure in the case of sharp downward adjustments, which could then put pressure on other segments of the financial markets.
To protect the investor’s interest of small and midcap funds, SEBI has regularized liquidity stress tests for these equity regulations, an exercise that is regularly performed for debt settlements.
MFS arise as a potential competitor for bank deposits, especially under the ambitious middle class in India.
The ratio of the AUM of the MF industry to total deposits has more than doubled from around 10 percent in March 2014 to 24 percent in March 2024.
Published on August 29, 2025
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