MUMBAI, April 27, 2020 (BSS/PTI) – The Reserve Bank of India on Monday
announced a Rs 50,000 crore special liquidity facility for mutual fund, days
after Franklin Templeton Mutual Fund decided to close six debt schemes.
In a statement, the central bank said heightened volatility in capital
markets in reaction to COVID-19 has imposed liquidity strains on mutual funds
(MFs), which have intensified in the wake of redemption pressures related to
closure of some debt MFs and potential contagious effects therefrom.
The stress is, however, confined to the high-risk debt MF segment at this
stage; the larger industry remains liquid, it said.
“With a view to easing liquidity pressures on MFs, it has been decided to
open a special liquidity facility for mutual funds of Rs 50,000 crore,” it
said.
The Reserve Bank of India (RBI) also stressed it remains vigilant and will
take whatever steps are necessary to mitigate the economic impact of COVID-19
and preserve financial stability.