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Budget 2023
Budget 2023

Budget 2023: Will FM Nirmala Sitharaman allow mutual funds to manage insurance money?

There’s merit in this Budget 2023 proposal, argues the writer. That’s because MF AMCs have the set-up and skill-sets in place, besides a plethora of options in terms of fund categories ― 11 equity funds, 16 debt funds, six hybrid funds plus index funds, theme/sector funds, etc. So, rather than the insurance company duplicating the efforts, it can simply be accorded access to.

January 18, 2023 / 11:33 AM IST
Nirmala Sitharaman

Nirmala Sitharaman

The Association of Mutual Funds of India (AMFI) has proposed that the Union Budget 2023-24 should allow fund houses to outsource their fund management activities to other market-linked instrument providers like insurance companies.

We are used to Mutual Fund Asset Management Companies (MF AMCs) as vehicles for management of funds, for unit-holders. A multitude of unit-holders would pool their investments by purchasing units in the funds / schemes offered by the AMC and the AMC would manage the investments as per mandate. This is the structure on which the industry runs. Now, let us look at the structure and symbiosis of the macro system.

Also read | Everything you need to know about Budget 2023

When mutual funds become service providers