Unsolved Trust of India

List of reports on UTI
07 September 2002

Mumbai: After tinkering for several years, the Indian government has finally bitten the bullet. Last week, it announced a landmark restructuring package, along with a Rs 14,561-crore bailout plan, for the country's oldest and largest mutual fund — Unit Trust of India (UTI) — that is sailing through troubled waters.

Unlike the earlier two bailouts, in which UTI was given financial support to meet its commitments, this time round the government has decided to address the core issue. It has decided to amend the UTI Act and split the institution, which manages over Rs 47,000 crore, into two — UTI-I and UTI-II.

Under the recast package approved by the Cabinet Committee on Economic Affairs, US-64, the mutual fund's troubled flagship scheme, and monthly income schemes with assured returns will be transferred to UTI-I. UTI-II will comprise all net asset value-based schemes of UTI.

UTI-II, with an asset-base of over Rs 18,000 crore, will be brought under a professional management, and privatised in time, along with the UTI brand name. UTI-I, with an asset-base of Rs 24,196 crore, will be managed by an administrator.