Objectives:
The primary objectives of
the UTI are:
(i) To encourage and pool the savings of the
middle and low income groups.
(ii) To enable them to share the benefits and
prosperity of the industrial development in the country.
Organisation
and Management:
UTI was established with an initial capital
of Rs. 5 crore, contributed by the RBI, LIC, SBI and its subsidiaries and
scheduled banks and financial institutions. The initial capital of Rs. 5 crore
was divided into 1,000 certificates of Rs. 50,000 each. To supplement its
financial resources, the trust can borrow from the Reserve Bank of India, the
amount being repayable on demand’ or within a period of 18 months.
UTI is managed by a Board of Trustees,
consisting of a chairman and four members nominated by Reserve Bank of India,
one member nominated by LIC, one member nominated by the State Bank of India,
and two members elected by the contributing institutions.
Functions
of UTI:
The UTI functions are
discussed below:
(i) To accept discount, purchase or sell bills
of exchange, promissory note, bill of lading, warehouse receipt, documents of
title to goods etc.,
(ii) To grant loans and advances.
(iii) To provide merchant banking and
investment advisory service.
(iv) To provide leasing and hire purchase
business.
(v) To extend portfolio management service to
persons residing outside India.
(vi) To buy or sell or deal in foreign
exchange dealings.
(vii) To formulate unit scheme or insurance
plan in association with or as agent of GIC.
(viii) To invest in any security floated by
the Central Government, RBI or foreign bank.
Activities
of UTI:
The UTI can sell and purchase the units
issued by it, investing, acquire, hold or dispose off securities. Keep money on
deposit with the scheduled banks and undertake related functions incidental or
consequential to that. All the units issued by the UTI are of the value of Rs.
10 each. These units were put on sale at face value and thereafter at prices
fixed daily by the UTI. Units can be purchased in ten or multiples of ten.
Schemes
of UTI:
The familiar schemes of UTI
are given below:
(i) Unit scheme—1964.
(ii) Unit Linked Insurance Plan—1971.
(iii) Children Gift Growth Fund Unit
Scheme—1986.
(iv) Rajyalakhmi Unit Scheme—1992.
(v) Senior Citizen’s Unit Plan—1993.
(vi) Monthly Income Unit Scheme.
(vii) Master Equity Plan—1995.
(viii) Money Market Mutual Fund—1997.
(ix) UTI Growth Sector Fund—1999.
(x) Growth and Income Unit Schemes.
Advantages
of Unit Trust:
The advantages of Unit
Trust are:
(i) The investment is safe and the risk is
spread over a wide range of securities.
(ii) The Unit-holders will be getting regular
and good income, as 90 percent of its income will be distributed.
(iii) Dividends up to Rs. 1,000 received by
the individual are exempt from income-tax.
(iv) There is a high degree of liquidity of
investment as the units can be sold back to the trust at any time at prices
fixed by trust.
No comments:
Post a Comment