The Union Finance Ministry said that demonetisation has fuelled the growth of the mutual fund industry. In a note submitted to the parliamentary panel, the finance ministry said that the MF industry witnessed a 45% growth in its AUM between July 2016 and July 2017.
The finance ministry said, “The gross financial saving in term of deposits, shares and debentures, insurance funds, and provident and pension funds increased from 9% to 13.3% of the GNDI (Gross National Disposable Income) in 2016-17 — a hike of about 48%. The assets under management by mutual funds recorded a substantial increase of 45%.”
RBI has also published an article on ‘Impact of Demonetisation on the Financial Sector’, which states that demonetisation has helped induce shift towards financial savings such as mutual funds. “Higher resource mobilisation by mutual funds after demonetisation has mainly been driven by retail and high net worth individual investors,” said the RBI report.
Citing healthy growth in insurance sector, RBI has said, “Despite subsequent slowdown in the growth rate, the premium collections still witnessed an average growth of 22% during November 2016 to September 2017.”