Page 21 - Banking Finance January 2018

MUTUAL FUND

MUTUAL FUND

NEWS
NEWS
NEWS
NEWS
NEWS

Scheme categories will change but mutual funds DBS introduces mutual
would remain popular funds on its digibank

The effect of a big announcement that we saw in Indian mutual funds industry in platform
October 2017-when the capital market regu-
lator Securities and Exchange Board of India DBS Bank, will now offer its digibank
(Sebi) standardized the scheme categories customers a
and defined them-is bound to spill over into unique expe-
2018. The fund houses were asked to submit rience of in-
their plans for this change, by 15 December vesting in
mutual funds
2017. After Sebi examines and approves
with a com-
these plans, fund houses will set in motion the
pletely paperless and 'signatureless'
process of reclassifying their existing schemes, even merging some of them.
on-boarding on its mobile-only bank-
Fund houses will also have to be mindful of managing investor expectations, on ing platform. DBS is the only bank in
the back of high returns that equity funds delivered in 2017. This is a task upon India to offer this first of its kind of-
every fund house, said Nilesh Shah, managing director, Kotak Mahindra Asset
fering that does away with filing of
Management Co. Ltd. However, the rising inflows will continue "not just from the
multiple forms to start investing in
beyond 15 towns, but also from towns beyond those," said A. Balasubramanian,
mutual funds.
chief executive officer, Birla Sun Life Asset Management Co. Ltd.
"With digibank, our intention has al-
"The big events of 2017 will result in consolidation in 2018. Scheme consolidation ways been to be digitally embedded
will result in the industry stabilizing, once all the schemes move to their new
in our customers' evolving financial
mandates. This would also trigger consistency of returns," said Kalpen Parekh,
president, DSP BlackRock Investment Managers Ltd. G. Mahalingam, whole-time lifecycle and offering them a differ-
member of Sebi, in his keynote address at the fourth edition of the annual Mint entiated customer experience," said
Mutual Fund Conclave held in Mumbai in October 2017, had said that the expenses Shantanu Sengupta, Head - Con-
should come down, going ahead. Incidentally, it has been 5 years since direct plans sumer Banking, DBS Bank India.
were introduced in all mutual fund schemes on 1 January 2013. "With fast growing awareness of
A look at all multi-cap equity funds shows that the average expense ratio in regu- mutual funds and adoption of digital
lar plans (which commission-earning distributors hawk) is 2.39%, as opposed to banking, customers are increasingly
the average of 1.45% that direct plans charge, according to Value Research. seeking to make their own invest-
Industry experts say Sebi is unlikely to bring down the total expense ratio. "But ments online in a simple manner with-
Sebi can push the industry further to follow the best practice guidelines by Amfi out having to depend on traditional
(Association of Mutual Funds of India)," said Balasubramanian. channels.

BANKING FINANCE | JANUARY | 2018 | 21

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