Mumbai: India’s mutual fund industry needs to streamline its product offerings and come up with proposals for a common policy on how to govern the industry, the head of market regulator said on Wednesday.

“Maybe it will be worthwhile for the AMFI (Association of Mutual Funds in India) to debate whether it can produce a policy paper. For the ball to start rolling the industry has to take the initiative,” CB Bhave, chairman of the Securities & Exchange Board of India (Sebi) said at a CII Mutual Fund summit.

Sebi had banned entry fee charged by mutual funds from August last year, limiting their ability to pay distributors and raise assets.

Mutual fund firms face stiff competition from market-linked insurance products which are similar to mutual funds but are allowed to pay higher commissions to distributors.

The mutual funds industry currently gets 74% of its business from the top ten cities in India.

The risk profile of a large section of India’s population was still not suitable for the capital markets and people with small savings would rather invest in banks for more security, he added.