RBI’s liquidity facility will ensure there is a refinancing window available The closure of six debt schemes by a fund house had increased worries that investors might rush to redeem and heighten redemption pressures.
So, the Reserve Bank of India’s (RBI’s) ₹50,000-crore special liquidity facility for mutual funds comes as a massive confidence booster.
It ensures that we have a backstop facility, if required, to meet redemption pressures caused by covid-19. Having said that, there is ample liquidity for debt funds, but RBI’s liquidity facility will ensure that there is a refinancing window available.
We are thankful to RBI and the Securities and Exchange Board of India (Sebi), which worked over the weekend, to announce these