Billionaire banker Uday Kotak on Friday highlighted a significant post-COVID shift in India's financial landscape, noting that mutual fund assets have grown to nearly a third of bank deposits in FY25.
Compared to just 13% in FY15, mutual fund assets under management (AUM), primarily in equities, have more than doubled to 31% of total bank deposits now.
This move signals a structural transformation in how Indian households' investment methods are shifting, he said in a 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," Kotak's post read.
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
June 20, 2025AdvertisementHe also shared a chart curated by Bloomberg based on data from the Reserve Bank of India and the Association of Mutual Funds in India.
The chart showed that in FY15, mutual fund assets, as a proportion of bank deposits, were at 13%. In FY19, this proportion increased to 20% before dropping to 16% in FY20. However, since FY21, the data showed an upward trend.
AdvertisementIn FY25, this ratio stood at 29%, while in May 2025, mutual fund assets made up 31% of bank deposits, highlighting a structural shift toward market-driven investments.
The total amount collected through Systematic Investment Plans, or SIPs, during May 2025 stood at Rs 26,688 crore, the data from AMFI showed. SIPs are an easy way to invest in mutual funds as they allow the investor to invest a fixed amount regularly, usually monthly, into a mutual fund scheme.
According to the data from Franklin Templeton India Mutual Fund, the Indian mutual fund industry has grown at 20% CAGR over the past decade and 24% in the last five years, signalling the growing investor appetite for long-term wealth creation.
As Uday Kotak's post gained traction, many people agreed with him that India is witnessing a growth of equity culture.
"We must allow this curve to peak! For an excessively taxed country like ours, this is the only medium that can create some wealth," a user said.
Meanwhile, another user called this development a recipe for disaster. "Imagine a 30-40% meltdown in markets. Nor will they have fixed deposits nor a portfolio. Recipe for disaster,' the user said.
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