RBI announces Rs. 50000 Crores Loan to Mutual Funds: Investors relieved!
Posted on: 27/Apr/2020 3:29:30 PM
Franklin Templeton was a company managing various mutual fund plans. These were hugely popular and a great number of persons had invested in these Mutual Fund Schemes.
In this situation, Franklin Templeton announced on 23rd April, all of a sudden, that it intends to close all the Mutual Fund Schemes it was managing! This sent a huge shock wave among the investors!
Even in the 6 Mutual Funds that were closed, the investment as on end August was Rs. 47658 Crores. However, till end March, there had been a loss of Rs. 16804 Crores. So, the value of the investment had reduced to Rs. 30854 Crores in 19 months!
During the month of April alone, there was a loss of Rs. 4075 Crores as on 20th April.
Accordingly, the present investment value is Rs. 26779 Crores- In other words, there has been a loss of over Rs. 20000 Crores!
There are 5 more years for the invested funds in the above schemes to mature. No clear notification were released on the extent of safety of the investment or the amount due for the investors. So, the investors were rather anxious about redeeming their investments!
The stock market experts observe that not only Franklin Templeton, but also most other Mutual Funds Organisations are in a rather bad shape with losses! The demand was strong that at this juncture, in order to arrive at a solution for the crisis, the Reserve Bank of India MUST intervene.
In this situation, reserve Bank of India has announced that a loan assistance of Rs. 50000 Crores would be extended to the Mutual Fund Companies.
RBI has announced this concession considering that Mutual Funds Companies should not suffer!
RBI has come forward with this assistance especially as Franklin Templeton closed 6 Mutual Fund Schemes,
Former Finance Minister P. Chidambaram welcomes RBI decision!
The former Central Finance Minister, P. Chidambaram, has welcomed the RBI loan assistance offer to the Mutual Fund Organisations. He has mentioned in his Tweet on his Twitter Page: I am glad that RBI has come up with this offer giving due consideration to the plight the Mutual Funds Organisations!
