The fight for the leading outlook in the mutual fund business started again in March, with Reliance Mutual repossessing the peak it had gave up to Prudential ICICI.

As on March 31, 2007, Reliance Mutual’s assets under management (AUM) stood at Rs 46,307 crore, whereas Prudential ICICI was ranked second at Rs 37,870 crore.

Vikrant Gugnani, president of Reliance Mutual alleges, “The growth in our assets has been principally because of the seven odd FMPs which we set up last month that brought up more Rs 4,000 crore. While, liquid funds outline a very small part of our principal sum, we are partially isolated from the liquidity having effect on the scheme at the end of every quarter.”

But according to the recent numbers accessible on Amfi’s Internet site, the overall mutual fund assets under management (AUM) that are arranged collectively has fallen by almost Rs 8,500 crore because of year-end buybacks.

Mr. Gugnani added that a large part of FMPs comes from retail capitalists. A FMP is a mutual fund type, which put funds into debt financial instruments whose maturity date corresponds with a detailed time limit suggested beforehand by the fund. The scheme is known as ‘Fixed Maturity Plan’.

In the meantime, banking institutions, advanced tax outflows and other institutions taking out funds due to CRR hikes and awful liquidness have destined that the majority of fund houses have envisioned a reduction in their AUM.

The massive loss of Rs 30,000 crore headed for the advance duty defrayals in March resulted to severe crunch in the securities industry, by the call money values increasing to a 10-year high of 60%.

This entailed that banks and other financial instruments would desire to invest straightly in the market more willingly than coming through mutual funds. Call money is money on call or overnight funds borrowed by a bank to meet their daily asset-liability mismatch.