Sebi Asks Uti To Meet Mip Shortfall

The Securities and Exchange Board of India (Sebi) today said the Unit Trust of India (UTI) was capable of meeting redemptions of its Monthly Income Plan-97 (MIP-97) units from its reserve fund. The plan mature on April 30.

If the UTI faced liquidity problems in redeeming MIP-97 units, it could bridge the gap by paying from its development reserve fund, Sebi chairman G N Bajpai said.

Sebi, which took stock of the UTI's position at a board meeting here yesterday, was not averse to allowing the mutual fund to enable investors to switch to other schemes.

Bajpai reiterated Sebi would ensure that investors' interests are protected. MIP-97 had a corpus of about Rs 1,400 crore. Its value eroded to Rs 980 crore.

 

This resulted in an additional burden of over Rs 400 crore. It is believed the UTI has approached the Life Insurance Corporation, the State Bank of India and the Industrial Development Bank of India to infuse additional funds to bridge the liquidity gap.