With Mutual Fund Assets Above Rs.80 Trillion, SEBI Chief Warns of Low Financial Literacy Levels

As Mutual Fund Assets Cross ₹80 Trillion, SEBI Chief Warns of Low Financial Literacy

India’s booming investment landscape has entered a new phase, with mutual fund assets soaring past ₹80 trillion, marking a seven-fold jump in just a decade. Yet, amid this rapid financial deepening, SEBI Chairman Tuhin Kanta Pandey has sounded a strong caution: investor participation is rising far faster than investor understanding.

Speaking at a regional investor awareness seminar organised by the National Stock Exchange (NSE) in Puducherry on Saturday, Pandey stressed that financial literacy has become central to economic empowerment as households increasingly navigate digital financial platforms and complex investment choices.

SEBI Chief Highlights Urgent Need for Stronger Investor Education

Pandey said India’s financial ecosystem is becoming more interconnected, forcing individuals to make decisions that significantly impact long-term security.

“Financial literacy is the foundation of empowerment, helping individuals learn how to save, invest, and protect what they earn,” he said, adding that the digital shift has made informed decision-making more essential than ever.

The SEBI chief noted that financial choices—from selecting mutual funds to assessing risk in equities—now touch people’s daily lives. As fintech, UPI-based investments, and low-cost brokerage apps expand access, the need for responsible participation grows.

Also Read : 2025 IPO Boom Pushes Fundraising Past Rs.1.6 Lakh Crore With More Issues Ahead

Puducherry Shows Rising Investor Participation but Knowledge Gap Persists

Pandey also highlighted Puducherry’s strong potential for deeper financial inclusion. The Union Territory’s investor base has grown 5.6 times in the last decade—from 22,000 in FY15 to nearly 1.24 lakh in 2025. Puducherry’s high literacy rate (above 85%) and strong per capita income have supported this expansion.

“The Union Territory reflects a population well-positioned to engage with financial products confidently,” Pandey said, though he cautioned that confidence must be backed by robust financial education.

India’s Investment Universe Expands Rapidly, but Literacy Levels Lag Behind

Nationally, India’s market participation has surged at an unprecedented pace. As of October 2025:

• India has 21 crore demat accounts

• Nearly 13.6 crore unique investors

• Around 1 lakh new demat accounts are opened daily

• Mutual fund AUM stands at ₹80 trillion, seven times higher than a decade ago

Despite these numbers, SEBI’s Investor Survey 2025 exposed a worrying trend:

• Only 36% of investors have moderate or high knowledge of securities markets

• Nearly 62% rely on friends, family, or social media for investment advice

Pandey said this gap between awareness and understanding is dangerous.
“Participation without knowledge exposes individuals to unnecessary risk,” he said. “The gap between awareness and action—and between participation and comprehension—underscores why financial literacy must deepen alongside market growth.”

SEBI Rolls Out New Tools to Strengthen Investor Protection

To improve market safety and reduce fraud, SEBI has introduced several digital and regulatory enhancements:

• Validated UPI handle framework to prevent payment fraud

• SEBI Check for verifying intermediary bank accounts

• DigiLocker integration for demat and mutual fund statements

• Simplified nomination rules to prevent unclaimed investments

• MITRA platform for tracking inactive mutual fund folios

• Upgraded grievance redressal ecosystem with SCORES 2.0 and SMART ODR

Pandey said these tools are part of SEBI’s mission to ensure that India’s expanding investor base is protected through technology-driven transparency.

Grassroots Awareness Becomes Central to SEBI’s Literacy Push

Recognising that financial understanding must start early and reach every district, SEBI has significantly expanded its grassroots initiatives.

• 50,000+ investor awareness programmes conducted across 90% of districts in FY24–25

• Partnership with the Ministry of Panchayati Raj, training 2.5 lakh panchayat representatives

• Regional media campaigns with Doordarshan and All India Radio

• New state-level SEBI offices to improve local outreach

• Expansion of multilingual and multimedia content, including the popular SEBI vs SCAM series

Pandey reiterated that investor education must evolve alongside markets. “SEBI will continue to deepen its multilingual, multimedia campaigns to reach every household,” he said.

A Growing Market Needs an Informed Investor Base

As India emerges as one of the world’s fastest-growing capital markets, regulatory bodies are increasingly emphasising responsible investing, risk awareness, and data-driven decisions. With millions of new investors entering equity and mutual fund markets each year, the challenge is ensuring they understand not just how to invest, but how to manage risk.

The SEBI chief’s remarks underscore a central truth: financial literacy is no longer optional. As India’s investment ecosystem grows larger and more complex, building a knowledgeable investor base will be essential to safeguarding long-term household wealth and strengthening market stability.

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