This has been a hectic month for India's mutual fund industry. Amid its ongoing struggle to escape the widespread aftermath of alterations in tax structures of debt funds, questions are being raised on how effective and powerful is their association — the Association of Mutual Funds in India (Amfi) — when it comes to “war of lobbies”.
It's not the first time that Amfi is being targeted by its own members. “It’s a dirty war of lobbies, which we always tend to lose out ...we never win,” says a chief executive in a company. “We are never heard seriously, despite being manufacturers of one of the most transparent financial products available in India,” he further adds.
Sector officials told Business Standard that banks have long been lobbying hard for the removal of this arbitrage in fixed maturity plans (FMPs). And they also had the realisation that the arbitrage benefit will have to go sooner or later.
Amfi, in its Budget proposal for 2014-15, had raised several issues. But the industry got precious little. Post-Budget, Amfi officials had been pleading with the government and the market regulator for some relief. But all what the finance minister could give was an exemption of transactions made between April 1 and July 10 of the current financial year.
“It was quite unfortunate. At least we had thought the government would hear our concerns. Amfi is a weak lobby and could not fight with the fat banking lobby in the country,” said executive vice-president of a foreign fund house.
However, H N Sinor, chief executive of Amfi, refused to comment on this issue.