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Debt Mutual Funds Witness Lower Redemption Since RBI’s Liquidity Measure

Debt Mutual Funds Witness Lower Redemption Since RBI's Liquidity Measure

Redemptions in debt funds have decreased considerably

Debt mutual funds have seen lesser variety of traders exiting and opting to redeem their funds because the Reserve Bank of India, final week, introduced a particular liquidity facility value Rs 50,000 crore for mutual funds.

In a launch by the Association of Mutual Funds in India (AMFI), on Sunday, stated that redemptions beneath credit score threat funds, one of many debt mutual fund scheme class, have tapered off “substantially” because the RBI’s announcement.

“There is 81.5% drop in net redemptions in Credit Risk Funds category on April 30, 2020 from the peak net redemptions as on April 27, 2020, courtesy measures announced by the RBI,” the discharge said.

”Declining pattern in web redemptions from Credit  Risk  Funds is a welcome  improvement, indicative of  Investors consolation from RBI’s particular liquidity facility obtainable to the MF trade. AMFI will proceed to work with Regulators for regular functioning of the market,” Nilesh Shah, Chairman of AMFI, stated.

RBI’s announcement got here days after the US-based Franklin Templeton wound up six of its India funds. Three days later, the central financial institution prolonged the advantages to all banks, regardless of whether or not they avail funding from the central financial institution or deploy their very own assets beneath the scheme.

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