Changing dynamics: Non-bank distributors widen lead in MF commissions

An analysis of MF commission data by Kotak Institutional Equities shows that non-bank distributors accounted for 75 per cent of total commission payouts in FY25, up from 65 per cent in FY18

Institutional and individual distributors are steadily capturing a larger share of mutual fund (MF) commissions at the expense of banks, as the distributor base continues to expand.

 

An analysis of MF commission data by Kotak Institutional Equities shows that non-bank distributors accounted for 75 per cent of total commission payouts in 2024-25 (FY25), up from 65 per cent in FY18.

 

The banking channel’s share has shrunk despite public sector banks holding steady at 9 per cent since FY21. In contrast, foreign and private banks have steadily ceded ground. Foreign banks’ share, once in double digits until FY16, has fallen to just 2 per cent, while private banks’ share has dropped from 25 per cent in FY18 to 14 per cent in FY25. 

 

According to experts, the rise of non-bank distributors can be attributed to their growing numbers. The individual distributor count has nearly doubled in the past five years from 87,630 in March 2020 to 1,62,266 in March 2025.

 

The commission data released by the Association of Mutual Funds in India (Amfi), which includes only those distributors who have a sizeable business, included over 3,100 names in FY25 as opposed to just 900 in FY20.

 

NJ IndiaInvest and Prudent Corporate Advisory, which have thousands of distributors working with them on a revenue sharing basis, have led the surge in non-bank distributor share in commissions. In FY25, they together had a share of 17.4 per cent, up from 16.4 in FY20. Anand Rathi Wealth has also seen a steady rise in share.