Mutual funds should step up retail participation: Bhave

Admitting it was tough for mutual fund industry last year, market watchdog, Sebi today asked industry to encourage retail investors in the face of huge redemption pressure from corporates.        

"Higher percentage of AUM must come from retail. Last year was a tough year for mutual fund industry and redemption pressure came mainly from corporates," Sebi Chairman C B Bhave told a CII-organised mutual fund summit here.        

In the face of financial turmoil in advanced economies, Indian mutal fund firms faced high redemption pressure in 2008-09 prompting the Reserve Bank to open special borrowing windows for MFs.        

However, at the same time, participation from the corporate investors is also needed in the MF industry, Bhave said.        

"I'm not saying that corporates should be driven away," he said.        

Asked on the variable load structure on MF schemes, Bhave said, that Sebi has issued a discussion paper on variable load structure and has received comments from market participants.        

"After analysing these comments, Sebi board will decide the future course of actions," he said. On the proposal to increase the networth limit of intermediaries, Bhave said that the market regulator had set up a committee to review the networth norms and the committee is presently finalising the report.        

"The committee is finalising the report and once the report comes to us, we will take a decision on that," Bhave said.        

India's debt market needs to be more liquid and greater confidence sohould be generated in the debt market like in equity market, Bhave said.