New Delhi, April 27: With a view to ease liquidity pressures on Mutual Funds, the Reserve Bank on India decided to open a special liquidity facility for MFs of Rs 50,000 crore. The central bank has stated that it remains vigilant and will take necessary actions to mitigate the economic impact of the novel coronavirus situation and preserve financial stability. Franklin Templeton Shuts 6 Credit Funds Run by its Indian Unit Amid Coronavirus Crisis.

"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," RBI said in a PRESS RELEASE.

RBI Tweet:

“The SLF-MF is on-tap and open-ended, and banks can submit their bids to avail funding on any day from Monday to Friday (excluding holidays),” the RBI release read.

Under the special liquidity facility for Mutual Funds, the central bank shall conduct repo operations of 90 days tenor at fixed repo rate. The scheme is available for April 27 till May 11 or up to the utilisation of allocated amount, whichever is earlier.

(The above story first appeared on LatestLY on Apr 27, 2020 10:31 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).