Mutual Fund’s decision to wind up is a matter of grave concern: Chidambaram

Tribune News Service
New Delhi, April 25

Former Finance Minister P Chidambaram on Saturday said Franklin Templeton Mutual Fund’s decision to wind up six debt schemes is a matter of grave concern to the investors, mutual fund industry, and the financial markets.

“I recall that a similar situation arose in the first week of October 2008 (during the global financial crisis) when mutual funds faced liquidity stress. The government immediately consulted RBI, SEBI, IBA, AMFI and others,” Chidambaram said.

He said an urgent meeting of the FSDC was convened at the time and a solution was found by the end of the day.

“On the next morning, officers of RBI and SEBI met at 8 am, and RBI announced a 14-day special repo facility and allowed an additional 0.5 per cent of NDTL. The situation was resolved,” he said.

The Congress leader said: “Fortunately, the markets will be closed today and tomorrow. I expect that the government will act promptly and resolve the situation quickly.”