FULL FORM OF UTI

   UTI

  Unit Trust of India (UTI) is a statutory private sector investment body. It was established on February 1, 1964 as per the Unit Trust of India Act of 1963. The main objective of setting up this institution was to channel corporate investments through encouraging productive community savings. Hence, it allows small-time savers to invest in risk-diverse fields. 

Investors who hold units under it can sell them to UTI at a given rate as well. A very particular reason why this is an attractive investment option is because the investment in UTI has a certain rebate on income tax. Moreover, the income from UTI is also exempted from income tax as per certain conditions. 

What is Unit Trust of India

Unit Trust is an investment plan where the funds are pooled together from the investors and then it invested in different asset class. The fund that has been pooled is later unitized. The investors are known as a unitholders. He or she holds a certain number of units. On the other hand, the second party which is the manager is responsible for the daily running of the trust and for investing the funds. 

The trustee, governed by the Trust Companies act in the year 1967, is the third party. The responsibility of the third party is to monitor the manager’s performance against the trust’s deed. The aim of the deed is to outline the objectives and the vital information about the trust. Also, the assets of the trust are held in the name of the trustee. Then they are held “in trust” for unitholders.

What are the Aim of UTI

This trust was set up with a number of objectives in mind. The most important one is safe return of investment in case the investor is in need of funds. It targets middle and low income groups and encourages them to invest for productive investment. 

Unit Trust of India (UTI) provides the investor with a safe return of the investment whenever there is a requirement of funds.

The main and the basic objective of the Unit Trust of India are to attract both small as well as large investors to invest. The received amount is invested in different asset class of which results steady industrial growth of the country.

Therefore, the main objectives of the UTI can be summarized as: 

• Promotion of savings from lower and middle income groups of people of the country who keen to invest their money safer return and donot have sufficient time to monitor their i

• Provide to these groups the beneficial results of investment returns and promote industrialisation in all parts of the nation. 

Management Structure of UTI

When this structure was organized, it began operating with an opening capital of 5 crore rupees. This was contributed by various other institutions such as the Reserve Bank of India (RBI), State Bank of India (SBI), Life Insurance Corporation of India (LIC) and so on. The UTI can borrow from the RBI in case it needs more financial resources, as long as it can repay the amount within a stipulated time.

The management of the UTI is monitored by a board of Trustees. This board consists of a chairman and four nominees appointed by the RBI, one by the SBI, one by LIC and two nominees appointed by the constituent institutions.