New Delhi, July 23: Blaming IDBI for showing "extreme irresponsibility" on certain management issues of UTI, the Joint Parliamentary Committee probing the stock scam has asked the Financial Institutions and other trustees -- RBI, LIC and SBI -- to divest their control from the country's biggest mutual fund. "It is IDBI that is accountable for the omissions and commissions of UTI as an institution...IDBI should be divested of the trusteeship and control of UTI as well as powers given to it under UTI act," JPC said in its draft report.

JPC also said that State Bank of India (SBI), Life Insurance Corporation (LIC) and other Financial Institutions, which have floated their own mutual funds, should be divested of the trusteeship and control of UTI, as it led to "conflict of interests".

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"Reserve Bank of India, whose job is of a regulator, should be divested of its responsibilities as a trustee of UTI," it added. Though IDBI controlled UTI and had powers to ask for information as per the provisions in UTI act, the JPC said "IDBI exhibited extreme irresponsibility by not invoking these sections of UTI act in the last 10 years."

The report further said that although IDBI started its own mutual fund, it continued to dominate the affairs of UTI despite the "obvious conflict of interest".

Referring to the S S Tarapore panel report, the committee criticised members of UTI's board of trustees for "gross negligence" and "violation" of prudential norms to declare dividends from the fund's reserves for four successive years to the extent that the reserves became negative.
Bureau Report