The Halal and Haram Aspects of Cryptocurrencies
In response to this question, the respondents concurred with different approaches and strategies in order for the mutual fund industry to be robust and developed. According to an interviewee, the industry needs more players and investors in the market. Further, diversity and a large economy is required for growth and prospects while, “small economies with restricted or limited activities will remain prone to exploitation by few large and influential investors”.
The other three respondents expressed their view that the industry can grow by leaps and bounds by financial inclusion of India’s biggest minority, i.e. the Muslim community. This goal can be achieved through the introduction of more Shari’ah compliant mutual funds into the existing market. One of them further added that this industry can grow by, “catering to financial needs of faith-conscious communities such as Muslims and Jains”. For instance, similar to Muslims, there are other communities that avoid interest based banking and finance. Owing to this, many communities avoid investing in financial instruments. Thus, financial inclusion of those communities through mutual funds ensures the bright prospects of the industry. A similar view was expressed by another respondent. He added that there is a dire need to liberalise the regulations in order to attract new players in the market. Further, the market should be transparent and responsive and speculation should be eliminated from the market.
The other three respondents viewed that the industry is in its infancy where only three lac crores Indian rupees goes to mutual funds while the deposits in banking are more than 70 to 80 lac crores Indian rupees. In other words, 6% to 7% growth of mutual funds in India is seen so far while comparing to America, around 80% of savings are channelled into mutual funds. A huge gap was observed while comparing both countries, however it shows the great scope for growth and development. All three respondents expressed that the industry should be friendly, as the majority of the people are unaware of mutual funds and the benefits of investing in such products.
A collective contribution is needed for this industry to grow further, for instance, regulators, fund companies, and distributors should come up with innovative products that result in profound growth of mutual funds.
The other two respondents provided few practical suggestions. They emphasised that proper advertisement of mutual fund products is crucial. “The industry has become sales oriented and people have become sales oriented. Thus, sales need comprehensive advertisements and promotions”.
It was also suggested by the same respondents that mutual fund companies should
expand their business by opening more branches in urban as well as in rural areas.
Further, distributors should be well educated and able to create awareness and knowledge
among people. The government should show its full support to mutual funds which is not
the case compared to the insurance sector of India.