From Golden Days to Tragic End

The country’s first ever mutual fund, the Unit Trust of India (UTI) was launched by the Reserve Bank of India (RBI) in 1963 under a special act Unit Trust Act, 1963 enacted by the Parliament. The units issued by it in 1964 were named US-64, which gave attractive returns and became popular among all classes of investors. Since its inception, US-64 distributed dividends on a regular basis, and thus acquired an enviable reputation. Individual investors and corporates caught on to the bonanza pretty quickly, and the funds collected by the scheme spurted. While the dividend rate rose from 18 per cent in 1990 to 26 per cent in 1995, unit capital more than doubled from a little over Rs7,000 crore to over Rs15,000 crore. “Those were the Golden Days for investors as returns from US-64 often exceeded yield provided by bank fixed deposits” said K H Hemant, a US-64 investor, who...