The Hindu : Second round of funding for UTI

Online edition of India's National Newspaper
Tuesday, Aug 13, 2002

Business

Business

Second round of funding for UTI

NEW DELHI AUG. 12. The Government is likely to provide second tranche of Rs. 500 crores to the beleaguered Unit Trust of India as part of the bailout plan to enable the fund to meet its payment obligations in assured return schemes.

The second tranche is in addition to the Rs. 500 crore already committed in the supplementary demand for grants recently approved by Parliament taking the budgetary support to UTI to Rs. 1,000 crores.

This was indicated by Finance Ministry officials after the UTI Chairman, M. Damodaran, held a marathon meeting here today to work out the details of the package, which could go up to Rs. 5,000 crores.

"The total package for UTI is for about Rs. 5,000 crores. But we are yet to decide on the way of funding it,'' the officials said.

Today's meeting lasting for about four hours followed Group of Ministers meeting last week to decide on the fate of UTI, IDBI and IFCI.

The GoM, headed by the Finance Minister, Jaswant Singh, had already endorsed the view of assisting the development financial institutions especially UTI, in their revamp process.

The proposals of the GoM would be shortly taken up by the Cabinet Committee on Economic Affairs for approval.

The UTI had demanded about Rs. 5,000 crores in the light of a negative reserve of about Rs. 3,700 crores and payment obligation for about Rs. 900 crores for two of its MIP schemes maturing this year.

In the face of redemption pressure of assured return schemes, the Government had already provided a guarantee for raising Rs. 1,500 crores from banks and FIs.

Mr. Damodaran declined to comment on the package but said the fund would launch two schemes — a regular income scheme and another variable investment scheme — by this month end. "We have got SEBI approval for the two schemes. The offer documents are under print and we will launch them in August end,'' he said.

PTI

Printer friendly page
Send this article to Friends by E-Mail

Business