MUMBAI, JAN 29: Securities and Exchange Board of India chairman D R Mehta said the total amount mobilised by the mutual funds, including the Unit Trust of India, will touch Rs 20,000 crore by the end of the current fiscal, which will be the highest in the last three years.The collection figure of the mutual fund industry stands at Rs 16,000 crore in the first eight months of this fiscal as against Rs 14,000 crore in 1997-98 and Rs 11,000 crore in 1996-97 during the corresponding period, Sebi chairman said at the national seminar on `Financial Markets and Institutions: Developments and Reforms' held here on Friday."This means that the market is getting institutionalised. Mutual Fund industry is taking advantage of the reforms in the industry that have established freedom of operations and clear prudential guidelines," he said.He was speaking of the silent changes that have swept the capital market over the last few years which, according to him, is often ignored by critics in their negative attitudeto the role of the regulator in making the capital market a safer and efficient place for investors.Earlier, the governor of Reserve Bank of India (RBI), Dr Bimal Jalan, said the domestic debt markets lack retail investor perspective which is a necessity for a vibrant and efficient market.Financial markets cannot really develop unless it is perceived as safe for investment by the individual investor, he said in his keynote address at the seminar.Only 15 per cent of non-governmental paper is considered safe by the retail investor, he said quoting a survey conducted by the Society for Capital Market Research and Development.``Over 25 per cent of issuers of debt instruments default on their obligations and given that there are no penalties, how can investor confidence be improved?'' he asked.Chairman of the Infrastructure Development Committee Rakesh Mohan said an active secondary market for debt was a prerequisite for cost effective infrastructure financing.According to him, about $25 to 50billion is required for India's infrastructure development and therefore there was a greater dependence on private capital inflows.Infrastructure Development Finance Corporation (IDFC) was looking at innovative products that mitigate infrastructure financing and allow the flow of private capital that is cost effective, said IDFC Deputy Managing Director Nasser Munjee.The near absence of securitisation, market reference rates and risk management products have hindered an efficient market system, he added.According to Prithvi Haldea, managing director of Prime Database, of the 30,983 crore debt issues last year, over 98 per cent were made through the private placement route. ``There are instances of unfair trade practices and poor diligence by the issuers,'' Haldia said.
