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JPC grills FinMin over UTI fund erosion

The Joint Parliamentary Committee inquiring into the temporary freeze of Unit Trust of India's flagship scheme US-64 questioned the finance ministry on Wednesday over its role in preventing erosion of funds in the country's largest mutual fund.

The JPC members wanted to know the reasons for the dip in the reserves of UTI and why dividends were paid out of proportion to the profit made by the organisation.

JPC chairman Prakash Mani Tripathi told reporters after the hearing that the officials of the Capital Market Division of the finance ministry had given some suggestions to prevent such occurances, which could not be revealed at present.

He said since this had been taking place over the years the officials were asked to explain the developments and ways to correct such happenings.

Tripathi said the ministry officials also did not favour a super-regulator or a lead regulator to co-ordinate various regulating agencies even while emphasising on better co-ordination.

They said currently Britain and Australia had the concept of a super regulator.

The chairman said the JPC was considering enhancing the level of fines of the Securities and Exchange Board of India through an amendment to prevent scam like situations.

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