A drop in sales of mutual funds is not just limited to India, it seems to be a worldwide phenomenon.

The Securities and Exchange Board of India (Sebi) has put its plan to scrap upfront commission by mutual funds to distributors for selling their schemes on the backburner, said two people close to the development.

Following a hue and cry over the issue of abolishing upfront commission to mutual fund distributors selling equity schemes, industry body Association of Mutual Funds in India (Amfi) has succumbed to the demand of small fund houses to scrap the proposal.

State-run Bank of India (BoI) Monday said it has acquired 51 percent stake in Bharti Axa Mutual Fund for an undisclosed amount.

Mutual fund companies looking for a reprieve in the form of reintroduction of entry loads or other charges may be disappointed, as the stock market regulator does not appear to be looking at the option in the near term

Chairman of the Securities Exchange Board of India (SEBI) UK Sinha is worried about participation levels in mutual funds.

Despite, short-term hiccups, untapped opportunity in asset management business in India is attracting foreign players who are betting on the long-term potential.

The UTI Mutual Fund board, which could not select a full-time chairman and managing director in the last 15 months, is now forcing upon itself another top-level vacancy.

Assets collectively managed by Indian mutual fund houses have breached the 6 lakh crore mark, in March 2012, and plunged to Rs 5,87,217 crore. This shrinkage in assets under management, or AUM, of over 8.5 per cent, from Rs 6,41,937 crore in September 2011, is not the only bad news plaguing the industry.