Page 14 - Banking Finance July 2025

MUTUAL FUND

Sebi Demands Rs 5.35 Cr

from OPG Securities in NSE
Colo Case
The Securities and Exchange Board of
India (Sebi) has issued recovery notices
to OPG Securities and its directors-
Sanjay Gupta, Sangeeta Gupta, and Ò»©­
Om Prakash Gupta-demanding pay-
ment of Rs 5.35 crore within 15 days
in connection with the NSE co-location
scam.
The demand includes penalties and in-
terest, following Sebi's April 2025 or-
der which found them guilty of unfair Falling Bank Deposit Rates Drive Surge in Mutual
access to NSE's secondary market serv-
ers. Sebi warned of stringent recovery Fund Inflows
actions, including attachment of prop- The recent 50 basis point cut in repo rate to 5.5% is expected to lower bank
erties, bank accounts, and even arrest deposit rates, prompting more investors to shift towards mutual funds, es-
in case of non-payment. pecially debt and hybrid funds. Systematic Investment Plans (SIPs) in equity

The case is part of a long-running regu- mutual funds have already gained popularity, with inflows reaching Rs 24,269
latory probe into the abuse of NSE's co- crore in April and SIP contributions rising 31% year-on-year to Rs 26,632
location facility by select brokers to gain crore.
early access to trade data and execute SIP AUM also surged 23% to Rs 13.9 lakh crore. With banks likely to reduce
faster trades, giving them an unfair FD rates further due to excess liquidity, retail and institutional investors are
advantage. Sebi has maintained a strict seeking better returns in mutual funds. Experts say debt funds and hybrid
stance on the misuse of market infra- schemes will benefit most from the trend.
structure to preserve transparency and SBI Mutual Fund and ITI Mutual Fund executives highlighted that this rate
investor trust in the system.
environment, combined with supportive RBI policies, could also revive credit
growth and sustain equity market momentum, further strengthening the
MF AUM Surge Signals mutual fund sector's appeal.
Major Shift in Investor

Behaviour: Uday Kotak He shared data showing mutual fund Sebi Permits Liquid and
The share of mutual fund assets under AUM as a percentage of bank depos- Overnight MFs for IA, RA
management (AUM)-primarily equity its rose from 13% in FY15 to 29% in
funds-has doubled to 31% of bank de- FY25. The shift signals rising investor Deposit Compliance
posits post-Covid, highlighting a funda- preference for market-linked instru- In a move to ease compliance and op-
mental change in India's financial inter- ments over traditional fixed deposits, erational difficulties, Sebi has allowed
mediation, noted Uday Kotak, Founder suggesting a maturing financial ecosys- Investment Advisers (IAs) and Research
and Director of Kotak Mahindra Bank. Analysts (RAs) to use liquid mutual
tem in India.
Posting on platform X, Kotak stated, funds and overnight funds to meet
The change also supports capital mar-
"India's saver turns investor Reflects their mandatory deposit requirements.
structural change in financial interme- ket development by channeling house- Earlier, the norm required a fixed de-
diation. It grows domestic risk capital hold savings into equity, while reinforc- posit lien-marked to the Administration
and creates an equity culture. But let's ing the need for investor caution amid and Supervisory Body (ASB) with a
be alert about excessive exuberance." market exuberance. scheduled bank.

BANKING FINANCE | JULY | 2025 | 13