Kolkata: Indians, more specifically middle class Indian investors, have been taking to mutual funds as ducks take to water, market analysts will tell you. They point to copious data — in July this year, the mutual fund industry added as many as 6.40 lakh investors. Equity mutual funds witnessed a 81.04% jump in inflows, which touched Rs 42,702.35 crore compared to Rs 23,587.05 crore just a month ago. Moreover monthly SIP inflow has gone up to Rs 28,464 crore with 9.11 crore contributing accounts.
But that’s only one side of the story. UTI Mutual Fund has come up with a set of statistics that puts the ‘galloping pace’ of the Indian mutual fund industry in perspective. While the figures presented by the AMC is humble, it also points to an ocean of opportunities ahead. Let’s have a closer look.
MF AUM as share of bank deposits in India
The assets of the mutual fund industry in India is only a small fraction of the deposits lying in the banks of the country, data show. At the end of the last financial year (FY25), the Indian mutual fund industry stood at 28% of the bank deposits in India — and it is the highest share so far. It is also true that the share was only 16% at the end of FY20 and represents a 12 percentage point gain over five years.
But the bigger picture emerges when comparative data from the US is considered. In April 2025, the AUM of the American mutual fund industry stood at 118% of the bank deposits in the US. It stood at 131% of the bank deposits in April 2019. In the past six years, it went down below 100% only once — in April 2022.
March 2019: MF AUM 19% of bank deposits
March 2020: 16% (of bank despoits)
March 2021: 20%
March 2022: 22%
March 2023: 21%
March 2024: 25%
March 2025: 28%
MF AUM as share of bank deposits in the US
April 2019: 131%
April 2020: 114%
April 2021: 126%
April 2022: 98%
April 2023: 109%
April 2024: 119%
April 2025: 118%
“For all the excitement and noise about galloping mutual fund investments in India, we must keep in mind that the AUM of the industry is only 28% of the deposits in the banks of the country. There is no denying the fact that it has risen from 19% of the bank deposits in FY19. But the immense potential that stares us in the face is evident from the fact that in developed economies this share is actually more than 100% of bank deposits. For example, in April 2025, the AUM of the mutual fund industry stood at 118% of the bank deposits in the US,” pointed out Prasunjit Mukherjee, mutual fund expert and MD of Plexus Management Services.
“The gap is simply too huge. Btu that gives me the hope that we have major things to do and hasten the process of financialisation of savings and investment,” added Mukherjee, who has spent more than three decades in the mutual fund industry advising middle class investors and HNIs on financial strategy. Even admitting the difference in investment culture and psyche of the average American investor from that of Indians, there is an unfathomable headroom for growth of the MGF industry in this country, he says.
The Indian mutual fund industry is, however, poised for a lot of action. To beef up distribution of mutual funds, AMFI (Association of Mutual Funds in India) is planning to train one lakh postmen in mutual funds so that they can double up as MF distributors in the rural areas of the country and carry the investment culture among the masses in the districts. On another front, tech-heavy platforms are encouraging digital-savvy Indians to make investments directly in mutual fund schemes, without going through the traditional distributors/advisors.
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