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Saturday, July 28, 2001



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Separate fund manager for each UTI scheme planned -- Measures launched to win back trust

N.K. Kurup

Suresh Krishnamurthy

MUMBAI, July 27

AS part of its revamp strategy, Unit Trust of India (UTI) plans to adopt the global practice of placing each scheme under a separate fund manager.

UTI also proposes to allot identification numbers to investors in all its schemes, the UTI Chairman, Mr M. Damodaran, said on Friday.

The objective of bringing each scheme under a fund manager like other mutual funds, is to ensure accountability, he said and thought UTI had plenty of talent within to do a competent job. However, ``if need arise we will go in for upgradation of skills,' ' he said.

Talking to Business Line, Mr Damodaran said he was in favour of scrapping the `hierarchical approach' where the Chairman can overrule others. In addition, he would not be using discretionary powers vested with the Chairman to sanction investments of up t o Rs 40 crore.

Dismissing reports he would stay out of fund management, he said he would be involved, but it would, however be part of a consultative approach with the fund managers.

He said allotment of identification numbers is being done to ensure the US-64 redemption package of 3,000 units is enforced investor-wise. Earlier, there were apprehensions that investors holding units through more than one unit holding account bought in different cities would be able to breach the 3000 unit per investor limit.

Mr Damodaran said all the UTI financial centres would be linked with its centre in Belapur near Mumbai. This will ensure speedy service to investors. ``We already have the software in place to implement the new system,'' he said.

Referring to the net asset values of US-64 and monthly income plans, the UTI Chairman said he expected the markets to move up in the next three to six months and exert a positive influence on the NAV. The monsoon has been good and the agricultural output is expected to go up. In addition, he also expected policy initiatives from the Government to boost the market sentiment.

Mr Damodaran also refuted reports that UTI had stopped dealing to stabilise stock markets. Dealing had stopped only for a day last week. He said trading volumes in the markets had come down sharply due to structural changes in stock trading and this has restricted the ability of UTI to buy and sell. Otherwise, there is no change in the levels of activity, he said. He denied the morale of UTI officials were down.

Mr Damodaran prefers a gradual approach in restructuring US-64 portfolio as it will have minimum impact in the market while taking care of the investors' interest.

Related links:
UTI suspends 3 officials; reallocates work
Onus of US-64 revamp package on UTI board: Sinha
Experts' group to advise UTI on US-64 revamp
Govt view on UTI revamp after Malegham report

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