Uti Faces Rs 8,217 Crore Shortfall

The Unit Trust of India needs a total Rs 8,217 crore to cover the current shortfall in assured return plans as on June 30, 2002. This includes a sum of Rs 3,740.2 crore being the negative reserves in its 14 monthly income plans (MIP)and Rs 4,476.40 crore to cover the negative returns in its US-64 scheme.

While the UTI is committed to paying out an assured rate of dividend in its MIP schemes, even the US-64 scheme has taken the shape of an assured returns scheme after it committed itself to a fixed repurchase price till May 2003.

The total tab for covering the negative reserves in the 14 MIPs and the US-64 scheme comes to Rs 8,216.60 crore as on June 30, 2002. The bill may change for the better or for worse in subsequent quarters depending on the state of the equity and debt markets.

Indeed, lower income from trading activities and a change in policies on the provision of non performing assets(NPAs) impacted the reserves during the year. Earlier, UTI had provided for NPAs as per banking and financial institutions norms.

A top UTI official explained,