Last Updated:June 20, 2025, 11:19 IST
Kotak says the trend is beneficial for the economy as it “grows domestic risk capital and creates an equity culture”, but he cautioned investors against “excessive exuberance”.
Veteran banker Uday Kotak said after the Covid, mutual fund AUM share, mainly equity, has doubled to 31% of bank deposits. (File Photo: PTI)
India is witnessing a shift in household savings preferences as mutual fund assets under management (AUM) have surged to nearly a third of the total bank deposits, according to the latest data shared by veteran banker Uday Kotak. In a post on social media platform X, Kotak said mutual fund AUM, driven largely by equity investments, has climbed to 31% of bank deposits as of May 2025, up from just 13% in FY15.
He said it reflects structural change in financial intermediation. It also grows domestic risk capital and creates an equity culture. But let’s be alert about excessive exuberance.
“India’s saver turns investor. Post Covid, mutual fund AUM share, mainly equity,has doubled to 31% of bank deposits. Reflects structural change in financial intermediation. It grows domestic risk capital and creates an equity culture. But let’s be alert about excessive exuberance,” Kotak said in the post on X.
India’s saver turns investor. Post Covid, mutual fund AUM share, mainly equity,has doubled to 31% of bank deposits. Reflects structural change in financial intermediation. It grows domestic risk capital and creates an equity culture. But let’s be alert about excessive exuberance. pic.twitter.com/KajiUX4f5B— Uday Kotak (@udaykotak) June 20, 2025
Over the past decade, mutual fund assets have steadily gained ground, especially after the COVID-19 pandemic. From FY21 onwards, the AUM-to-deposit ratio began accelerating, rising from 21% in FY21 to 26% in FY24 and reaching 31% by May 2025. This is seen as a sign of growing investor participation in capital markets, supported by digital access, awareness campaigns, and a rising appetite for equity.
Kotak emphasised that this trend is beneficial for the economy as it “grows domestic risk capital and creates an equity culture.”
However, he also cautioned investors and policymakers to remain vigilant against “excessive exuberance.”
The rise of mutual funds, particularly systematic investment plans (SIPs), has been instrumental in channelling long-term household savings into the markets. Industry experts say this evolution could reduce India’s reliance on foreign capital while strengthening financial resilience domestically.
The monthly inflow into mutual funds through the Systematic Investment Plan (SIP) route hit a fresh high of Rs 26,688 crore in May, according to the latest data from AMFI released on June 10. However, the net equity inflow fell 22 per cent month-on-month in May to Rs 19,013 crore from Rs 24,269 crore in April 2025.
The number of contributing SIP accounts in May rose to 8.56 crore against 8.38 crore in the previous month. The monthly SIP inflows for April were at Rs 26,632 crore.
The total SIP assets under management (AUM) rose to Rs 14.61 lakh crore against Rs 13.90 lakh crore in April.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously asso…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously asso… Read More
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