Can AMFI’s new appointment help it turn a new leaf?  

February 25, 2010

The Association of Mutual Funds in India (AMFI) has decided to appoint Hoshang Noshirwan Sinor, better known as HN Sinor, as its chief executive (CEO). Mr Sinor, a former CEO of Indian Banks Association (IBA), is expected to replace AP Kurian, current chairman of the industry body, who will be stepping down in the month of September.

Mr Sinor’s appointment comes at a time when AMFI appears to have lost face within industry circles because of its fumbling and lack of preparedness over many issues. “Over time, it has been reduced to a department of the Securities and Exchange Board of India (SEBI), rather than acting as a strong voice for the industry. It has failed to become the voice of industry participants like small distributors and asset management companies (AMCs), as well as independent financial advisors (IFAs), who have been struggling in the wake of various game-changing regulations introduced by SEBI last year,” says a chief executive (CEO) of an asset management company (AMC).

AMFI, as an industry body, is expected to argue intelligently for the industry. It has failed miserably in this regard. It has conducted no research and has hardly any points to make on any of the key issues affecting the industry, such as abolition of entry loads. For what an industry association can do, witness the effectiveness of Confederation of Indian Industries (CII) which commands the respect of businesses and regulators alike, because it puts enormous efforts into networking and also co-opting industry leaders in the association’s activities.

Sources within the industry have welcomed this new appointment. Fed up with AMFI’s parochial and indecisive approach, several experts are hopeful that Mr Sinor will make certain positive moves. An IFA source said, “Mr Sinor is an honest person with a clean record. I expect that he will do some good. AMFI has lost credibility. It is plagued by many problems, most of which have been brought forth by its lackadaisical approach. It doesn’t allow small distributors and small AMCs to have a say in policy matters.”

Another IFA said it is nice to have someone with a fresh perspective and approach. “Although he comes from a different industry, he brings with him vast experience that will count. A lot depends on what he can bring out of the relationships with regulators and how the industry as a whole tackles various matters. Ultimately, he is representing an industry, to work as the voice of the industry. But the industry chooses to be docile in front of regulators. It has to have the conviction to take up various matters with the regulator. For this, he will have to mobilise support from within the industry.”

A graduate in commerce and law, Mr Sinor’s career has spanned 43 years in the banking sector. He has previously worked with Central Bank of India, Union Bank of India and ICICI Bank, and was the chief executive of the IBA until July 2008. He has worked on various committees of the Indian government, Reserve Bank of India (RBI) and Confederation of Indian Industry (CII) and has hence contributed to policy and decision-making processes. — Moneylife Digital Team