November 7, 2025 : Despite India’s mutual fund industry achieving a historic milestone with record Assets Under Management (AUM), Securities and Exchange Board of India (SEBI) Chairperson Tuhin Kanta Pandey has cautioned that the industry’s true reach remains “shallow” and heavily concentrated in a few urban pockets. Speaking at a financial sector summit, Pandey underscored that expanding mutual fund penetration and strengthening investor trust must be top priorities for the next phase of growth.
Pandey noted that while AUM numbers are at all-time highs—reflecting rising investor interest, strong equity markets, and increased SIP flows—the overall participation still remains uneven. A significant share of the AUM continues to come from metros and Tier-1 cities, leaving Tier-2, Tier-3, and rural India far behind.
He pointed out that although over 8 crore unique investors are now part of the mutual fund ecosystem, the penetration relative to India’s population is still minimal. Many households continue to rely on traditional savings instruments rather than market-linked products, mainly due to limited awareness, fear of risks, and lack of trusted advisory support.
Pandey further emphasised that investor inclusion must go hand in hand with strengthening trust. According to him, the industry must ensure full transparency, fair pricing, and ethical selling practices to protect investors—especially first-time or small-ticket investors who may not fully understand risks.
He also warned that mis-selling remains a concern and needs strict monitoring. Ensuring that distributors, platforms, and advisory services act in investors’ best interests is crucial to maintaining long-term confidence in the financial system.
The SEBI chief highlighted several measures the regulator is working on, including simplifying disclosures, improving grievance redressal mechanisms, and enhancing digital platforms to make investing more accessible and easier to understand.
Pandey stressed that the mutual fund sector has immense potential to become the preferred savings avenue for millions of Indians—especially as the economy grows, digital adoption rises, and financial literacy initiatives expand. However, he reiterated that to unlock this potential, the focus must remain on bringing new investors into the fold by building awareness, trust, and accessibility across the country.
Industry experts echoed Pandey’s views, noting that India’s mutual fund landscape is entering a new era where inclusion and investor protection will drive the next phase of sustainable growth.
Summary
SEBI chief Tuhin Kanta Pandey says mutual fund penetration remains shallow despite record AUM. He stresses improved inclusion, transparency, awareness, and investor trust as the key priorities for industry growth.