INTRODUCTION--UTI

The Unit trust provide an opportunity to small and medium

investors to make investments indirectly. The unit investors purchase units of the trust which are of small denominations. The trust invest this money in purchasing shares of good companies. The income and gain from this investment is shared with unit holders. The UTI was established by Govt of India under the UTI Act, 1963. The Trust was accordingly set up in Feb, 1964. Managed by Chairman and board of Trustees. UTI is governed by SEBI MF Regulations and it works on three tier structure of sponsors, trustees and AMC.

FUNCTIONS

The main functions of UTI are as follows: To encourage savings of lower and middle-class people. To sell units to investors in different parts of the country. To covert the small savings into industrial finance. To give them an opportunity to share the benefits and fruits of industrialization in the country. To provide liquidity to units.

SCHEMES OF UTI
UTI has introduced two kinds of units.

-- Ordinary units of Rs 10 each. -- Capital units of Rs 100 each. The units are not traded on stock exchange but they are liquid. UTI fixes repurchase price of investor and is always ready to buy them from investors.
Banks have started accepting units as securities while granting

loans. UTI fixes repurchase price of investor and is always ready to buy them from investors.
Banks have started accepting units as securities while granting

loans.

Critical Evaluation

The, UTI operations have been on increase. However, the UTI is not free from criticisms and charges which are given below: The UTI has been charged with the lack of transparency in its operations. The UTI has been operating within the walls of protection provided to it by the Unit Trust Act, 1963. As such, the UTI has not been subject to any regulation from various statutory bodies including the SEBI. The UTI has been manipulated by vested interests to effect the transactions on the stock exchanges.

 The UTI has been accused of corruption at various levels.

Investors do not possess the right to attend the annual

general meetings of the trust. The expense ratio of the UTI is quite high. Investors do not get benefits of the capital appreciation of the investments made by them. The operations of the UTI fall much short of the standards of efficiency. The investors are not getting adequate return on their investments

Open Ended Unit Schemes.

Unit Scheme-1964 Unit Scheme-1971 Unit Scheme for Charitable and Religious Trusts and Registered

Societies,1981 Housing Unit Schemes, 1992 Bhopal Gas Victim Monthly Income Plan,1992. Senior Citizen Unit Plan,1993. Closed Monthly Income Unit schemes,1987,1988,1989. Growing Income Unit Schemes, 1987, 1989,1990. Deferred Income Unit Schemes,1990, 1991, 1992. Growing Monthly Income Unit Schemes, 1991, 1992. Mutual fund Schemes,1986.

Subsidiaries of UTI
The UTI Bank ltd.
UTI Investors Services Ltd. UTI Investor Advisory Limited. UTI Security Exchange Limited. UTI Institute of Capital Market.

UTI Role- Industrial Finance.

Assistance to Corporate Sector

UTI has been providing funds to corporate sector for accelerating the pace of industrialisation. Form Of Assistance UTI has been providing assistance in the form of privately placed debentures( loans, underwriting, right issues of shares and debentures etc.) Purpose wise assistance UTI has been giving assistance for new as well as existing projects. Industry wise assistance The trust has been funding various industries as per national priorities.

 Sectoral Distribution of assistance

UTI provides financial assistance to both public and private sector besides the coorperative and joint sectors. State wise distribution of assistance UTI provides assistance to industrial enterprises situated in different part of the country in order to have diversified investment portfolio.

ADVANTAGES
Safe Investment

UTI invests its funds in a wide range of securities. Any risk in one securities is offset by a good return from the other. Steady Income The unit holders are ensured of the regular return on their investments. Expert Handling UTI has the advantage of having expert advice while making investments in the security of various companies. Tax Concessions The investments in unit carry some tax concessions. Liquidity The main advantage of investing in units is that of liquidity. Investor can get his investment back at any time.

Unit Scheme-1964
The announcement by the Chairman of Unit Trust of

India (UTI) Mr. PS Subramanyam, that all repurchases of units would be stopped for six months, betrayed the trust that 20 million domestic investors had reposed in the institution. In one sweep, UTI removed liquidity, one of the prime components of an open-end fund to nothing at all.

Advantages of US-64
Lucrative Returns
High Liquidity Low Risk.

Small Initial Investments.

No forfeit.

DOWNFALLS New Economic policy of 1991, US64 fund manager started to make it as an equity fund. Capitalising on the stock market boom of 1992 was their idea. US64 suffered jolt when UTI invested in Reliance Group share and it offered fake shares. They didnt learn from the SBI Mutual fund mistake which had earlier undergone stock market volatility.