SEBI imposed fine on three major financial Institutions

SEBI imposed fine on three major financial Institutions of India.

SEBI has imposed fine on SBI, Bank of Baroda and LIC on 14 August 2020. The reason for imposing fines was due to non-compliance of the norms of mutual funds.

State Bank of India is the sponsor of SBI mutual funds. Whereas, LIC and Bank of Baroda are the sponsors of LIC mutual funds and Baroda mutual funds. All these financial institutions hold more than 10% shares in these mutual funds.

Apart from this, LIC, SBI and BOB are the sponsors of UTI AMC. They all hold more than 10% Share individually in Asset Management Company and Trustee Company of UTI MF

SEBI amended the Mutual Funds Regulations in March 2018. According to which, if a shareholder or sponsor holds more than 10% of the share in Asset Management Company, then he cannot take more than 10% in another mutual fund house.

Whoever were not fulfilling this norms was given time till March 2019. Despite that SBI, LIC and Bank of Baroda violated it and did not met the criteria till March 2019.

UTI AMC is promoted by four sponsor financial institutions which is SBI, Bank of Baroda, LIC and Punjab National Bank. They all hold 18.24% shares in the fund house. According to SEBI report, these 3 Entities have not denied that they have not done any deviation of mutual funds integrated norms. However, all three have said that they have started the initial public offering for disinvestment of UTI AMC shares. These entities are on the verge of selling their shares of the UTI Trustee Company. They have said that this sale process will be over by September end and all the increased shares will be sold by them.

SEBI has written in the order that all three entities are liable for the violation of Mutual Funds Norms are hence liable for penalty, Accordingly, penalty of Rs. 10 lakhs is impose to each. SEBI has the right to levy penalty on any entity if it violates the Mutual Fund Norms, the officials said.


SEBI imposed fine on three major financial Institutions of India i.e. State Bank of India, Life Insurance corporation and Bank of Baroda.


What is UTI AMC?

According to CIBIL report 30 September 2019, UTI AMC is the seventh largest asset management company of India. They have the Board of Directors and a very good management team that tells the company about the ups and downs of the mutual funds market. They have four sponsor financial institutions for SEBI Mutual Funds Regulation. Which is State Bank of India Bank of Baroda, Punjab National Bank and Life Insurance Corporation.



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