Abstract: This paper focuses on three aspects: (a) Mutual fund a tool to stabilize Indian economy. (b) Review of existing literature with respect of mutual fund performance and (c) Asset management and channelization of scattered savings in the infrastructural development of India. The result shows that mutual fund is a powerful tool and financial product to mobilize scattered savings among investors and channelize these fund to infrastructural development and thereby economic development of the country. The total asset management of mutual fund business is increased from 1079.46 billion rupees to 7014.43 billion rupees from the last ten years. The role of Banks and Financial institution to promote mutual fund business is ever increasing in the market regulated economy in India.