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MF News Demonetisation has helped MF industry grow its assets by 45%: Finance Ministry

Demonetisation has helped MF industry grow its assets by 45%: Finance Ministry

Overall, gross financial savings has increased by 48%.
Team Cafemutual Nov 10, 2017

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.”


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1 Comment
jaideep · 10 months ago
DeMo helped the financial savings markets, more by accident than design. Banks were flooded with cash and because they had (and still have) almost no one to lend to, deposit rates kept dropping to their current low levels. Investors had no choice but to invest outside the bank FD market, which will benefit them in the long term. But DeMo also destroyed livelihoods for many citizens in the unorganized economy, some sectors are still struggling to recover from the DeMo shock till date.
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